Deputy Premier Samuel Joseph has requested financial support from the United Kingdom to help fix Montserrat’s failing electricity, water and sewage infrastructure.
Speaking during his latest ‘From the Minister’s Chair’ Facebook video broadcast, Joseph said the government-controlled Montserrat Utilities Company (MUL) is heavily in debt.
It owes EC$100,000 in loan repayments every month and “the fact of the matter is that the company is bankrupt”, he told viewers on 13 May.
Joseph, who is also the works and energy minister, said the “temporary” utilities infrastructure was put in place following the Soufriere Hills volcano eruption and may collapse soon.
The hardworking people across Montserrat are “literally propping up with sticking plaster and duct tape this country”, he said.
“In order for it to advance, I’m saying that we need the capital investment from our funding partners, which I’m asking for here.”
Financial failure
For many years, the government-owned but independently-run Montserrat Electricity Services and Montserrat Water Authority were in charge of delivering power and water.
Neither company was making money and both were heavily subsidised by government to pay for both operations and capital purchases – so in 2008 were merged to form MUL.
During his 20-minute broadcast, the deputy premier spoke about the company’s subsequent failings.
In 2011, MUL borrowed EC$6.7 million from the Barbados-based Caribbean Development Bank (CDB) to construct a new power plant.
The loan was supplemented with a $1 million CDB grant, $22.4 million from the UK’s Department for International Development, and $6 million in land and local resources.
Joseph explained that there was a moratorium on the loan, which meant it did not have to be repaid away right away.
However, that came to an end in 2023, he said, and monthly payments of about $100,000 per month are now due.
“MUL as a company, as it currently exists, cannot afford to pay that loan and that has now become a responsibility of government,” the energy minister said.
He described MUL as “functionally bankrupt”.
Electricity transmission
Joseph told viewers that the electricity infrastructure was put in place 20 years ago following the eruption of the Soufriere Hills volcano.
But due to natural elements such as corrosive salt from sea breezes, the system is now failing, he said.
“So, every now and then you’ll hear about these pole fires because a specific pole goes and then you lose current….and that we expect to keep happening,” he explained.
A new generator is in the process of being installed which will solve the generation problem and extra funding would help to replace transmission and distribution lines, Joseph said.
“When current goes now, this is not a generation problem, which has mostly been resolved, it is that our transmission lines are failing and need to be replaced and need to be repaired.
“And there’s a process in place now to see the exact cost, what material needs to be gotten to be bought to fix that problem,” he said.
Leaking pipes
The water distribution is equally as flawed, the deputy premier said, with only 30% of water generated making it to customers due to leaks.
“This is a huge problem because there’s a cost to generate this water and it’s a cost that MUL does not recover for the water that does not reach the homes.
“So the huge capital expenditure now there has to be done to replace these pipes to find out where these leaks are and to repair them.”
He added that the physical infrastructure at the springs where the water is gathered is also in a state of “severe disrepair” and requires millions of dollars to be fixed.
In the 2024-2025 Budget, Joseph said, money has been awarded to MUL for this specific purpose.
“So we understand that these issues are there and we are working hard to try to resolve them… we are a country known for our water and we cannot let that fail.”
He said, like the power infrastructure, the water distribution system was also built over 20 years ago “and it is in a state now where we are afraid that it may collapse”.
Ageing sewage plant
The UK government installed Montserrat’s sewage treatment plant, based in Lookout, 25 years ago – but at the time it was second-hand and already 25 years old, the deputy premier said.
“Again, we have serious concerns about that plant and about its functionality, and we have costing for that plant and it’s approaching $10 million,” Joseph continued.
“So, there’s lots of capital, infrastructure and monies that will be needed to get all these things back to a [good] state.”
He said business cases have been written and put forward to the UK government.
“We, as a government, believe there’s no way internally that the Government of Montserrat through the taxes it collects from its people can put those repairs in place.
“Those monies must be and have to be grant funds from the administrative power whose responsible for basic needs and for our security.
“And nothing is more basic than water, energy and sewage,” he said.
The deputy premier said the case has been put to the UK government formally but he also felt the need to announce the need for funding publicly.
“So that the population here and the UK ministers and the decision makers understand these are dire situations and these are not trivial monies that we’re asking for.”
https://www.facebook.com/MCWLEMontserrat/videos/444773268531131
