EDITORIAL - Rethinking water and the NWC

With the absence of water rationing, no one may be paying attention to the National Water Commission (NWC) except, perhaps, this newspaper and its columnist, Mr Aubyn Hill.

Mr Hill, in his latest article last Friday, made a suggestion for the harvesting of water, previously proposed in these columns, which remains eminently sensible.

He believes that the Government should legislate that a feature of every new housing development in Jamaica be the installation of water tanks/cisterns, and that it be among mortgage and planning-approval conditions.

Mr Hill raised the matter in the context of the ability of such a scheme to drive manufacturing, create jobs and save the NWC, the government-owned water company, a chunk of its huge expenditure on electricity to drive its pumps and filtration plant, with the positive upshot of reducing the country's annual US$2-billion oil import bill.

We agree.

We, however, believe that there are wider policy issues relating to water and its management that are worthy of serious discussion. Not least of these is what ought to be the future ownership of the NWC.

But first, Mr Hill's suggestion and its potential impact.

Jamaica frequently experiences drought. The NWC does not have the capacity to store enough water for these dry periods. It, therefore, rations water rather than use price, as this newspaper has suggested, to control consumption.

The NWC has around 425,000 customers, each of which, it can be assumed, represents a household or business. Should each household have the capacity to harvest and/or store a minimum 600 gallons of water - and the expectation is that it would be far higher - that would be 255 million gallons, or more than 40 per cent of the rated capacity of the Mona Reservoir and as much as is filtrated daily by the NWC.

Firms manufacturing water-storage tanks would receive tax incentives to make the process affordable to households. The impact would be to shift the development of water systems from mega to micro facilities, and from the public to the private sector - a trend we are already observing.

HEADING TO BANKRUPTCY

Then there are deeper issues surrounding the NWC. In its 2010-11 financial year, the commission reported after-tax losses of $3.8 billion. Its accumulated deficit was more than $15 billion. Its long-term debt was more than $10 billion. The bottom line: The NWC relies on a taxpayer bailout for solvency and is heading to bankruptcy.

Part of the problem is that 70 per cent of the water produced by the NWC is not paid for; some is stolen, but a huge portion goes to waste in old, leaky transmission systems that it cannot afford to repair, or fix fast enough.

The company's efficiencies are compounded by the social politics of water. At the equivalent of J$60 per 220 gallons of water, the product is severely underpriced. Consumers have no incentive to conserve, and Government is afraid to put the price close to its economic cost.

The best solution would be to privatise the business. An appropriate support can be put in place for the poorest consumers and tough regulations used to ensure investment to drive efficiency and lower price to consumers.

In the absence of such action, the ambition of the NWC to become Latin America's and the Caribbean's leading water facility will remain a pipe dream.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.