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WASA pushes for rate hike
The Water and Sewerage Authority says it is in dire need of a rate increase because it was spending more money to supply the nation water than it receives from customers.
According to chairman Romney Thomas the public utility company is in a dire financial situation where “despite the monopoly status WASA’s revenues are way below operating costs resulting in a heavy dependence on subventions from the Government.”
Appearing before the Joint Select Committee on Local Authorities, Service Commissions and Statutory Authorities yesterday, Thomas identified “low tariff” as the main reason.
The last rate increase which WASA got was 25 years ago, in 1993, and current rates, he said, were “among the lowest in the region.”
Low rates, he said, not only impacted on the utility’s bottom line and dependence on the State but has resulted in “consumers using water inefficiently,” which he said led to “wastage.”
Thomas said rates are used to meet salaries and wages, recurrent and operational costs and improve the delivery of service to customers.
Romney said the intention was to “transform WASA to operate independent of Government subventions,” and to do so, he said, they needed to get a “tariff increase.”
Romney said WASA was in a “catch-22 situation,” where it has a lot of “aged infrastructure and as a result, there will be breakages in lines and disruption in service.” This, he said, was as a result of a lack of finances, which had resulted in “some projects being stalled because of a lack of funding.” One such project, Romney said, was the “dualing of the Caroni line,” which was starting in the 2010-2015 period. The Commission could not say what was the cost of the project.
While 93.6 per cent of the population, according to the utility have pipe-borne water, only a small percentage of the population gets water seven days a week and the authority provides more than 47,000 truck-borne deliveries annually at a cost of between $300 and $500 per truckload of water.
The irony though is that in order to present a Business Plan to the Regulated Industries Commission (RIC) a requirement for a rate increase, the cash-strapped utility has retained the services of a Consultant Albert Gordon at a cost of US$70,000. The contract ends in December of this year.
Asked by Committee member Khadijah Ameen why WASA needed to hire a consultant at US$70,000 a year to do something that should be done in-house, CEO Ellis Burris said the utility did not have the competence in-house “and the matter was rushed. We wanted to get the business plan as rapidly as possible so we had to bring competence.”
The plan, however, according to RIC chairman Hyacinth Guy is incomplete.
She said while the RIC had “a first version of the business plan” it did not supply “all the information and up to this point in time we don’t have a final document some information is still outstanding.”
Executive director of the RIC James Lee Young noted that when T&TEC got its last rate increase in 2006-2011 “they developed a regulatory department whose function is to provide the information we need. WASA does not have that. I would envisage going forward that we would expect to see that resource reside within WASA.”
WASA officials admitted to the committee there are “inefficiencies’ in the system and although ideally, complaints from customers should be addressed within 7-10 days it sometimes takes longer. Interaction with customers is also poor.
Romney said, as a result, they had embarked on an “exercise to train and sensitise staff on dealing with the public.”
That, however, will change once the RIC’s Quality of Service Standard regime for the utility is implemented, the standard mandates the utility to respond within 48 hours to complaints from customers. Those standards go hand in hand with rate determination.
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