Govt financing 45 per cent of GWI operational costs

…as company admits it can clear costs without rates’ hike

The Guyana Water Incorporated has sought permission to hike its fees, citing operational costs, but the entity’s own finance director has admitted that if the GWI can make all customers pay their fair share, a fee increase would be unnecessary.
The Public Accounts Committee of the National Assembly was treated to this

surprising admission on Monday. Under questioning from PAC Chairman Irfaan Ali, GWI Finance Director Jaigopaul Ram admitted that 45 per cent of GWI’s operations are financed by Government, with the 2016 subvention for electricity amounting to $1.8 billion.
A breakdown of GWI’s expenses was then provided. It was established that another 45 per cent of expenses being borne by the entity included salaries, maintenance and supplies, and 10 per cent related to miscellaneous expenses. Ram admitted that if the entity could collect all its payments at the existing rate, an increase would not be necessary.
“If you were to collect all the rates from all your revenue at the existing rate,” Ali posited, “this means that there is no need for tariff increase. So your first objective would be that all your customers in the database are paying?”
The finance director concurred. He further revealed to the PAC that the utility company’s 2016 audited financial statements are completed. This comes after consumer representatives had demanded GWI make its statements available before seeking hikes in fees.
Permanent Secretary in the Ministry of Communities, Emil McGarrell, explained that subsidising GWI’s operational costs has been the case for years. This was done so that the rates to consumers could be maintained.
“Mr Chairman, for several years, the Ministry of Finance, out of a sum at the end of the year, would make payment to (Guyana) Power and Light on behalf of GWI, to cover its energy costs. That has been going back for as long as I can remember,” he disclosed.
“That was done as part of the Government’s continued assistance to (the) company, because it was obviously not charging economic rate for the supply of water. So one area was covered, and that was energy charges,” McGarrell explained.

Rates
For unmetered, residential properties, a monthly fixed charge of $500 along with $1,500 per month is on the table. Their metered counterparts face charges of $500 per month and $112 per cubic metre. For unmetered pensioners, a water usage charge of $740 per month is proposed, while the fixed charge will be waived.
Metered non-residential customers face a monthly charge of $500 and a monthly consumption charge of $150 per cubic metre.
Unmetered non-residential customers are charged based on the category of their operations… small, medium and large.
For all these categories a fixed monthly charge of $500 is proposed. In the case of small operations, it is proposed that $3,750 per month be charged, while medium operations are facing a $12,000 charge. Large scale consumers can end up paying $24,000.
For the sewerage tariff, GWI is proposing $417 per month for residential customers and pensioners; while a monthly charge of $2,860 is being proposed for non-residential metered and unmetered small scale consumers. Medium scale consumers are facing a monthly charge of $4,350 and large scale consumers $6,375 per month.
These charges exclude ancillary charges, which will encompass fees that include reconnection charges.
GWI was forced to defend its proposed increases to consumers at a public hearing at Cara Lodge on February 12. At the Public Utilities Commission-facilitated hearing, however, Political Commentator Ramon Gaskin confronted GWI head on about the status of its audited financial statements, and when those would be available for public perusal.
In response, GWI CEO Dr Richard Van West-Charles had said that the entity was still in the process of finalising 2016 statements. Another public hearing on the GWI increases is scheduled for today.