Chairman of the Water and Sewerage Authority (WASA) Romney Thomas intends to go after delinquent customers who now owe them $250 million in arrears. In fact, Thomas said yesterday that customers who refuse to pay WASA for water they were billed for may now face the courts and lose their properties.
His comments came hours after Finance Minister Colm Imbert, in presenting the 2017 budget on Friday, said WASA “continues to require major continuing financial support from the Government in the form of overdrafts facilities, loan financing and subventions, since the water company’s annual shortfall between revenue and expenditure was in excess of $1 billion” and its financial condition was chronic. Imbert also stated that WASA had not been paying some of its suppliers.
Yesterday, Thomas admitted the water company had been hit by financial woes which did not happen overnight. He also revealed that WASA owed its contractors “between $268 to $275 million” based on invoices that were approved.
“The fact of the matter is that we have significant shortfalls between expenditure and revenue. That is a fact. Our revenues are very low,” he said in a telephone interview.
While Public Utilities Minister Ancil Antoine has spoken about WASA’s need to increase its water rates to generate revenue, Thomas said the company intends to take extreme measures to collect its outstanding arrears accumulated over the years.
“We are going to be taking some harsher measures in terms of collecting outstanding rates,” Thomas insisted.
For the past year, he said WASA has been on an active collective drive.
“We have disconnected a lot of customers. We have entered into an arrangement with commercial customers. It has been effective. I would like to think so. However, I think we can do much more.”
Thomas said the law also provides stringent measures that allows WASA to recover those arrears. One of those options, he said “was to sell people’s properties. But this is something that we would not want to do. It should be a last resort. It has not been employed as far as I know. But it is an option available to us.”
In some cases, Thomas said WASA has taken legal action against recalcitrant customers.
“Definitely that has been one of the measures that is available to us to collect our outstanding rates. WASA is very serious about that. That is a matter that is actively engaging the board.”
Rates too low
Unable to say how many customers WASA had initiated legal action against, Thomas said “we have started the process by initiating pre-action protocol letters in some cases. This is after disconnection. This is something we are very attentive to.”
Asked how much money delinquent customers owed WASA, Thomas said, “Our last check is closer to about $250 million outstanding in receivables by residential, industrial and commercial customers.”
WASA has 402,748 residential customers, while there are 8,910 commercial customers.
However, Thomas said going after the arrears would not cover WASA’s shortfall in revenue.
“While collecting the outstanding arrears would assist, we have to think about measures that are going to be sustainable in the long term to allow us to continue our operations and provide the service that the public wants.”
If Cabinet agrees on a rate increase, Thomas said the Regulated Industries Commission would have to determine and approve the new rates. The last time WASA increased its rates for residential consumers was 1993, he said, adding rates have been so low that they have to depend heavily on the State for financial support.
“That is a decision the Government has to decide. For the foreseeable future, unless we do something, if you have a gap (between expenditure and revenue) like that...even if we collect outstanding rates...if everybody pays their rates...there is so much that you can do to increase revenue or cut expenditure. I don’t think that anything that we do is going to close that gap to that extent.”
Thomas said WASA’s problem has been compounded by the closure in March of Centrin and ArcellorMital who were major consumers of water. Should WASA should be privatised?
“Water is such a essential resource, its is not something that you would necessarily want to put into the hands of a private entity,” Thomas said.