WASA has an enormous financial hole to plug. And citizens need to be very “scared”.
This was the position coming out of the Joint Select Committee meeting yesterday on the management of WASA.
The Authority has a $10 billion debt. Moreover, customers, mainly residential, owe it close to $1 billion. On top of all of this, its subvention from the Government has been reduced.
And one of the ways that WASA is hoping to get out of this financial hole is to have a rate adjustment. It has also begun to pilot metering in certain communities.
“If the trends continue and get worse as projected...the citizens and consumers could look forward to huge increases in order for WASA to implement its strategic plan or else we are stuck in the Dark Ages,” committee member, Opposition Senator Anil Roberts said.
WASA’s acting CEO Alan Poon King said he did not want to pre-empt any decision by the Regulated Industries Commission: “But I think the objective is to bring the rates charged more in line with the efficient cost for the delivery of service and reduce the subvention from the Government as time passes,” he said.
“Shorter baths one time,” Roberts quipped. He said he did not know how WASA was going to get investment to improve its infrastructure, do metering, pay its 4,900 employees, fulfil its strategic plan. “How is all this going to happen?” he asked.
Poon King reiterated the rate adjustment would allow WASA to generate its own revenue to fund its recurrent capital and debt. “While the debt is substantial it is going to have to be included in the equation with respect to rates and charges”.
“Mr Poon King, my hair is growing grey based on my concern for the population....The way WASA intends to do all of this is through increased rates paid by citizens. Citizens now have to be very worried because the burden is going to fall on us,” Roberts said.
Poon King said all WASA was seeking was a “realistic” rate. He noted that people pay $3 for one small bottle of water and feel that they are getting value for money. But the current maximum rate of water from WASA is $3 a day.
No more ease on payments
Last year there was a suspension on disconnections on account of the Government’s policy of giving people some ease during the Covid 19 pandemic. But WASA will be seeking to recover its debt from customers.
WASA’s Director, Customer Care, Sherry Dumas-Harewood, said $17 million had been recovered thus far in 2021. She said after two bill cycles have passed, WASA can start the debt recovery action, but its policy is to first use “encouragement” and then “enforcement”.
She said whereas the debt arising from industrial customers was “under control”, it was the debt from business and domestic customers that the Authority had to continue to work on. Committee chairman Deoroop Teemul observed that WASA was adopting a “soft approach”.
In response to a question from committee member Saddam Hosein about the sums owed on the category of water extraction, Dumas-Harewood said the major company owing sums to WASA was Petrotrin. Asked by Roberts whether WASA was going after Heritage, Guaracara or Paria, Poon King said this was a specific issue of pump water from the Guaracara River in the reservoirs associated with the refinery.
Poon King said this had been the subject of deliberation and negotiation between WASA and Petrotrin for a number of years. He said the matter is to be “revived with the current Guaracara (company) to recover the debt or to have it written off because the debt is very old...beyond four years,” he said.
Dumas-Harewood said the Authority had experienced a $110 million decrease in annual revenue between 2016 and 2020, notwithstanding the increase in water accounts (14,000 more accounts and 3,000 more waste water accounts).
She said any decrease in the activity in the industrial sector such as plant closures and shutdowns, would impact on WASA’s revenue.
“In terms of plant shutdowns and idle plants we lost $20 million”. She said the revenue from residential customers has continually decreased “in terms of people not paying their WASA bills”. Residential customers owe $586 million, or 64 per cent of total amounts owed to WASA.
Poon King said WASA’s implementation rate for its 2017-2022 Strategic Plan as at December 2020 was a mere 17 per cent, causing Roberts to state that at that rate it would take another ten years to implement.