By Lynford Simpson, Staff ReporterTHE GOVERNMENT has moved to write-off a whopping $6.5 billion of the National Water Commission's debt, Donald Buchanan, Water and Housing Minister, told the House of Representatives yesterday.
He disclosed this as he spoke in the 2002/2003 Sectoral Debate.
Mr. Buchanan explained that Cabinet had agreed to write-off $3.5 billion of loans to the NWC for capital expansion. These will now be treated as grants. The remaining $3 billion represents current debt from recent capital expansions.
According to Mr. Buchanan, the move to assume the debt was "out of recognition that the NWC's tariff has never been sufficient to recover capital cost."
The Minister defended the management of the cash-strapped utility: "I want to make it absolutely clear that these debts, and the decision of the Cabinet to assume them have nothing to do with poor management at the NWC, but rather to recognise and accept the fact that the NWC will never be able to pay for that magnitude of capital expansion when the tariffs it is granted do not make provision for this," he emphasised.
He said that the initiative will give the water utility a "clean bill of health". But, he stressed that "we (the Government) are insisting on the maximum level of efficiency in the agency..."
"Therefore, from henceforth, elimination of waste and cost containment will be the hallmarks of the NWC's performance," he added.
The Cabinet decision, Mr. Buchanan said, should in no way compromise quality of service for which the commission had in recent times been getting high marks from the Office of Utilities Regulation (OUR). He said the Government was committed to carefully assessing, with a view to implementing, the recommendations of a management audit currently being carried out by KPMG Peat Marwick.
