of external competition, the latter's vice president and CEO told Hamilton Rotarians yesterday.

Mr. Alan Rance added the financial viability of our local water industry depended on maintaining sales levels.

"Government has had a long standing policy of trying to provide least cost potable water. If we lose sales volume in our small market there will be no alternative except to raise prices to cover the loss if income.

"I think Government and Watlington Water need to plan together to jointly compete against the threat of external competition. This is based on the same principles as recent suggestions that retailers must look to consolidating.'' Mr. Rance added that for Government to best discharge its responsibility for the public water supply in the long term it should ensure Bermuda has the most efficient public water system possible.

"I advocate that Watlington and Government's waterworks ought to merge to create a single mixed ownership corporation in which Government and the private sector would own shares.

"All parties could vary their percent ownership through the trading of shares. Government could have a share or no share if it decided to do so.''