Burdened by mounting financial problems, including $500 million in loans it cannot service, the Barbados Water Authority (BWA) today announced it was considering a rise in water rates to help it cope.
However, General Manager Keithroy Halliday did not say how steep the increase was expected to be or when it would become effective, explaining this would be left to the regulatory agency, the Fair Trading Commission (FTC).
In fact, Halliday told a press conference this morning at the BWA’s headquarters in The Pine, St Michael, it would be some time before consumers were asked to pay more for water because no request had been made to the FTC.
However, he said the current rates were inadequate and the water company needed to generate additional revenue in order to cope with its myriad financial problems.
“A discussion has to be had at some point in time as to the relevance of the current tariff regime and whether or not it makes sense. This is not a discussion that can be had in isolation; this is a discussion that requires the input of a number of stakeholders. This is not a discussion that we can make solely on our own, simply because we fall now under the oversight of the Fair Trading Commission. They and they alone will arbitrate and determine the extent of how and what figure, if at all, we pursue,” the general manager said.
“I will say to you . . . it is not something that we can discount. It would be silly of me to say we wouldn’t look at it, but I can say in the immediate term, there is still a lot of work to do before we can make that presentation or consider such a presentation,” the BWA boss added.
The last time the water company raised rates was in July 2009, a 60 per cent hike which then Acting Minister of the Environment, Water Resources and Drainage Haynesley Benn said was meant to encourage Barbadians to conserve the precious commodity.
“I hope that the proposed rate increase would help us to conserve more. I am trusting that Barbadians would find sensible ways of conserving the water they use in all areas of the home. We simply must no longer be labelled as water scarce,” Benn said then, adding that most policies designed to encourage conservation had “largely failed”.
He had also indicated that in an effort to improve the overall provision of service to the public, the then David Thompson-led Cabinet had instructed the utility company to introduce a 24-hour operational system in key areas of the BWA’s operations to replace the one in which services were provided between 8:30 a.m. and 4:30 p.m. and over-time paid for work done after hours.
“This arrangement has proven to be costly and the curtailment of service after hours has been a constant source of irritation to the public,” Benn had explained.
Nearly a decade later the company continues to be beset by all sorts of financial difficulties and complaints about the quality of its service.
Halliday today said the BWA has been losing 49 cents on every dollar due to leaks, and was struggling to manage after having invested millions in two additional desalination plants, one in St Lucy and the other in Ealing Grove, Christ Church, as well as spending on specialized posts that included upgrading its technology.
“Finances has had to be distributed to deal with that” the water executive said, while stressing that even with the 60 per cent rise “to try and match some of the needs, the increase in rates would not have addressed, in retrospect, the financing or investment needs that we have actively engaged in the last two years and would have to continue to actively engage if it is we have to continue to make the BWA relevant in terms of its delivery both on potable water side and as well as what we need to do to shape our deliverables on the wastewater division side”.
Against this background, the water works company was adamant that the present financing model was not sustainable and it “does not work and sometime over the next while, we have to take some hard decisions to how we can move towards getting a model that is a little more relevant to our needs”.
Halliday noted that the BWA was trying to deal with outstanding staff increments and adjustments involving the workers’ and management’s bargaining units, and since the revenue figures could not be altered, the company had to better control its expenses.
“For instance, if we are losing 49 cents on every dollar and we can move that down to 30 cents on every dollar, that saving will help us boost as well,” he said, adding that the BWA would establish a well-equipped non-revenue unit not just to troubleshoot and find burst pipes, but to actively deal with water recovery.