Sun | Dec 11, 2016

NWC taps foreign help for rate hike

Published:Sunday | January 13, 2013 | 12:00 AM
A National Water Commission plant in Kingston.- File

Arthur Hall, Senior News Editor

The National Water Commission (NWC) is paying an international firm approximately $25 million to help it prepare its application for an increase in water rates.

But the company says the money it is paying to the international firm Castalia Strategic Advisors to help it prepare its request for a tariff increase is not unusual and will cost the Jamaican taxpayer nothing.

Quality-based selection

According to the NWC, while it possesses some level of expertise in the area, the enlisting of a qualified, independent firm was imperative, and accrued from the requirements of the funding agency, the Inter-American Development Bank (IDB).

"These requirements were established to ensure a tender process that incorporated international benchmarks and met international quality-based selection standards," argued the NWC.

The company said the tender process was also open to Jamaican entities which could have bidded for the right to help it prepare its tariff increase request.

The NWC is now preparing to ask the OUR for a rate increase but it is yet to decide how much more it will ask Jamaicans to pay.

That should be before June as the company's current five-year regime expires in the second quarter of this year and it is required to submit findings 90 days before the expiry date.

The cash-strapped entity has argued that it needs to increase rates because its costs have been going up sharply since the last increase in 2008.

It will be depending on Castalia to help it determine the level of increase to request and to prepare the argument to convince the OUR to grant this increase.

Castalia is an international firm which helps firms and governments develop effective organisational, contractual and regulatory strategies.

It has been involved in helping to reform many state-owned enterprises while advising on pricing and tariffs.

In 2011, it was retained by the Jamaica Public Service Company to carry out an independent evaluation of options to bring down energy costs in Jamaica.