Consolidated seeks to sell Mexican desalination stake
Caribbean-based Consolidated Water Co is looking to sell its 50% stake in the 100 MGD (378,500 m³/d) Rosarito desalination project in Baja California, Mexico.The project, near the US border about 30 miles (48 km) from San Diego, is intended to supply drinking water to northern Baja California and southern California, USA.
Reporting on its 3rd quarter operating results, released on 9 November 2011, Consolidated CEO Rick McTaggart said, "NSC Agua, the joint venture company carrying out the development of the Rosarito project, has been unable to secure additional funding for the project and to address the remaining uncertainties associated with this project in a timely manner."
As a result, said McTaggart, Consolidated had given a third-party related its NSC partner, the Norte Sur Agua investment group, an option to purchase its interest in NSC. If this option was not exercised, he added, Consolidated would evaluate other alternatives, which might include seeking other buyers, restructuring NSC Agua or ceasing operations related to the Rosarito project.
"Although we are very disappointed that this particular opportunity has not developed as planned, we have acquired a great deal of knowledge and expertise regarding the water markets in Mexico and the southwestern United States and expect to explore other opportunities in these regions in the future," McTaggart predicted.
On a more optimistic note, the CEO had previously announced that Consoldiated had begun delivering water from its new 4.8 MGD (18,168 m³/d) Blue Hills expansion in the Bahamas, which had been accomplished in a record time of nine months from the contract award to the date of initial water deliveries.
"We look forward to the increased revenues that will result from the 67% increase in the capacity of the Blue Hills plant," said McTaggart. "This expansion will enable the Bahamas government water utility to satisfy the needs of its customers in a far more efficient and cost- effective manner by eliminating the need to barge water from Andros Island to New Providence Island."
Reflecting the economic times, McTaggart reported that new project opportunities in Consolidated's primary Caribbean market continued to develop at a much slower pace than in the past, so the company was looking to new fast-growing areas of the world, such as Asia, where it had been evaluating certain business prospects over the past 18 months.
" We believe some of these prospects are quite promising, and we recently hired a regional sales and engineering manager to pursue them," McTaggart said. "We will keep our shareholders posted if and when we obtain customer contracts and decide to allocate capital to the resulting projects."
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