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RUM INCREASE TO FUND SEWAGE SYSTEM UPGRADE

July 23, 2002 – Thanks to a deal with the federal Environmental Protection Agency and the U.S. Justice Department, the territory will get the money to upgrade its sewage treatment facilities through an increase in rum production at St. Croix's V.I. Rum Industries.
At a press conference on Monday, Gov. Charles W. Turnbull announced that the plan allows V.I. Rum to increase production by 20 percent. This would put $13 million to $15 million a year into the territory's coffers in the form of federal rum tax revenues, about double what it currently receives. The EPA until now has opposed the expansion of V.I. Rum production.
The company produces Cruzan Rum and other liquor products. Bulk sales to the U.S. mainland account for most of its revenues.
To keep tabs on the environmental impact of the increased production, the local government has agreed to spend $6 million over the next five years to study and treat the effects of the industry's discharge through its 1,500-foot ocean outfall pipe.
The $13 million to $15 million will go to fix the territory's ailing sewage treatment system.
The territory has racked up millions of dollars in federal fines because the systems are in such
bad shape.
"We have lived too long with the unhealthy effects of deferred maintenance and neglected investment," Turnbull said in a prepared statement. "I believe that the plan announced here today is a major investment in our future and marks a new beginning for the benefit of all Virgin Islanders."
According to information provided by Government House, under a consent decree entered in U.S. District Court in 1984 and amended in 1996, the government was to bring its sewage treatment system up to federal standards by 2004. This was not physically or financially possible, Turnbull said.
The new deal gives the government until Feb 28, 2006, to bring St. Croix into compliance and until Feb. 28, 2007, to achieve compliance on St. Thomas. Preliminary work on both islands is to begin by Oct. 1.
St. John's new sewage treatment plant went on line last year. St. Thomas has a new treatment plant at the Mangrove Lagoon.
Needed improvements to the territory's sewage treatment system will cost as much as $60 million, Turnbull said, adding that he said he hopes more federal money will arrive to help. He said a bill recently passed by the U.S. Senate calls for development of a federal-local financing plan to assist with sewage treatment projects. A measure recently passed by the House of Representatives includes $1 million to fund preliminary planning and design work.

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