Days after a senior official of the Guyana Water Incorporated (GWI) reasoned that an increase in water rates could be avoided, the company is maintaining that the request for a higher tariff is necessary to finance investments.
GWI’s Finance Director, Jaigopaul Ram told the Public Accounts Committee (PAC) on Monday, February 19that if the entity was successful in collecting all its revenues then it could finance its operations given that it receives more than $1.8 billion in subventions from the government annually.
However, GWI’s Managing Director Dr Richard Van-West Charles told the Public Utilities Commission (PUC) today that the increase is necessary as revenue collection alone is not enough.
According to a statement from GWI today, “improvement in the quality of water provided to citizens as well as an increase in supply is dependent on much-needed revenue to finance the upgrade of aged infrastructure, build human resource capacity and purchase the requisite equipment and chemicals to treat the water.”
The PUC is currently holding public hearings to determine whether GWI’s request for an increase in water rates should be granted.
The GWI Head is quoted as saying that every company caters for some level of delinquency from customers who do not pay their debt. As such, he explained that although the company’s debt figure is high, collections alone cannot sufficiently finance the investments made to treat water for a growing economy.
“When we apply the Limitation Act and look at the debt beyond the last three years, there is no way; if you collect that debt anyway, that you can cover the cost …because nothing stands still. We’re having customers every day, we’re having new housing schemes; both private and public, we are looking at already existing schemes that do not have access, those that require an improvement of quality such as New Hope”, Dr Van-West Charles is quoted as saying in the statement.
The statement noted that Dr Van-West Charles further highlighted that in the context of the strategic plan, maintenance of the system is necessary and the needs of the hinterland regions as well as the improvement of water quality across the country must be taken into consideration.
During his presentation, it was also highlighted that since the last rate change 12 years ago, the cost for purifying water alone has increased by more than 100%, let alone the cost for equipment and manual labour, among other things.
“In this regard, Dr Van West-Charles stated that the utility has since moved to employ and train staff in the necessary areas of expertise such as learning new drilling techniques and water quality improvements,” the statement added.
GWI is proposing a change in rate for residential and non-residential (metered and unmetered) customers and a new category for pensioners.
The PUC has requested an unaudited copy of GWI’s 2016 financial statements to be presented at the next public hearing scheduled for March 14, 2018, at Cara Lodge from 10:00hrs.
