BWA seeks to recover millions in outstanding debt

The Barbados Water Authority (BWA) is facing a debt crisis with more than $100 million owed to the state utility, most of it by residential customers.

Acting CEO Christopher Mapp confirmed that the authority is working to recover at least 40 per cent of the outstanding sum as officials intensify collection efforts after years of leniency during the COVID-19 pandemic.

Mapp said the majority of delinquent accounts date back to 2020 when disconnections were suspended as part of national COVID-19 relief measures.

“We first noted increases in the bills [due for disconnection] around COVID-19. As you would know, during that time, we could not disconnect customers, and that was a social responsibility. People needed water to take care of themselves,” he said during a press conference on Saturday. “So I think people took the water for granted, and a lot of customers did not pay their water bill. We saw some increases that continued throughout COVID-19.”

He explained that even after disconnections resumed in 2023, many domestic users were not reconnecting their service, suggesting deeper financial distress.

“The incidence of customers due for disconnection has been increasing. And even when we disconnect—and we do seek disconnection as a last resort—when we disconnect, we do find that there are many domestic customers who are not reconnecting their water. So we know that there is hardship out there.”

Mapp likened the authority’s accounts receivable to a loan portfolio, acknowledging that a portion will inevitably go unpaid.

“We do float a large figure in terms of the receivables, but we know that all of it is not going to be collectible. We know that we will have to evaluate and make some adjustments to that portfolio in terms of the true collectability,” he said.

According to Mapp, residential customers account for the majority of both total billing and delinquent accounts.

“Residential customers comprise 60 per cent of the overall receivables, also 60 per cent of the billing,” he said. “Domestics are the main offenders. I know hotels generally tend to get a bad name, but really and truly the hotels are responsive when we do those disconnections or when we threaten disconnection—they’ll come in and pay the bill or make a payment plan with us.”

Acting director of finance, Kent D’Hayle, explained that only about 40 per cent of the outstanding debt—roughly $40 million—is realistically collectible, though the authority will continue pursuing all arrears.

“We have started the preliminary work on that, and we believe that about 60 per cent of that portfolio may not be collectible,” he said. “We will still go after that 60 per cent that may not be collectible, but we are saying about 40 per cent might actually be collectible, at least $40 million.”

D’Hayle said the recovery process will depend on the success of customer repayment plans, typically structured over two to three years, though longer periods may be approved for those in financial hardship.

“We work with those customers, and we extend the payment plan that will allow those customers to repay the debt,” he said. “If we look at the ultra bands of the terms that we set—which generally is three years—it’ll be a three-year period, but ultimately it can be longer because if the customer falls short on that payment plan, obviously you’re not going to collect the outstanding balance.”

Mapp reiterated that while disconnections are necessary, the authority remains conscious of the social implications.

“We can’t just go out and start disconnecting customers because water is life,” he said. “We encourage them to come in and do payment plans. We do give very, very good terms.”

Despite these efforts, Mapp conceded that disconnection is no longer the deterrent it once was, with many Barbadians resorting to alternative water sources instead of settling their bills. (SZB)