NWC drowning under $33b debt, falling short on critical projects

A performance audit has unmasked severe structural and financial challenges at the National Water Commission (NWC), revealing that the utility provider is buckling under a staggering $33-billion debt while failing to execute critical water and sewerage infrastructure upgrades.

 The findings are the latest in an Auditor General’s Department (AuGD) report tabled in Parliament on Tuesday, following an evaluation of the effectiveness and efficiency of the NWC’s management of capital projects.

 Auditor General Pamela Monroe Ellis said the audit was done to assess alignment with the organisation’s budget and strategic objectives.

 It revealed that despite moving from a multibillion-dollar loss of $5.7 billion in financial year 2019-20 to a profit of $0.2 billion in financial year 2023-24, the agency is facing a severe cash shortage.

 The audit showed that for every dollar the state-run entity owes in short-term debt, it has only 50 cents in cash, causing its unpaid bills to suppliers to climb from $10.6 billion 10 years ago to $33.2 billion at March 2026.

 The financial strain, the audit report said, is worsened by a major collection problem as the NWC only expects to collect $4.6 billion from customers, having already written off $18.3 billion as unrecoverable bad debt.

 Still, the report said the NWC increased its internal project budget to $2.1 billion, up from $1.5 billion in 2019-20.

 The audit also found that the NWC consistently spent less on water infrastructure than it planned and that actual capital spending fell short of the budget in four of five years.

 The AuGD said this meant that planned improvements to water and sewerage systems may have been delayed.

 The audit report showed that the NWC systematically failed to meet its infrastructure goals during the review period by delivering substantially less capital work than budgeted. This resulted in direct, adverse consequences for public water and wastewater service reliability.

 Further, it said that although the utility’s total capital budget grew from $7.2 billion in the 2019-20 financial year to a peak of $12.1 billion in 2020-21 before steadily declining, the spending was severely underexecuted in every year except 2019-20.

 The failure stemmed from a lack of budget credibility, the report said, as the NWC's capital plans were unanchored from realistic revenue, expenditure, and financing forecasts, forcing the agency to routinely defer or scale back critical infrastructure upgrades at the expense of the public.

 “The consequence falls on service delivery. Planned investments in water, sewerage, and treatment infrastructure were deferred or scaled back, with implications for the reliability of services to the public,” Monroe Ellis said in the report.

Further, the 60-page audit report noted that 58 per cent (29 of 50) of audited contracts ran late, with delays of three months to two and a half years.

 The delays were due mainly to contractor underperformance, the NWC entering into works contracts without first securing the requisite pipelines, unresolved land-access issues, slow approval of variation orders, delayed fund disbursements, and legal challenges.

 “We expected NWC to apply strong project and contract management, including adequate project planning and effective oversight, to ensure capital projects were delivered on time, within budget, and with value for money,” said Monroe Ellis.

 However, case study reviews for five contracts revealed delays up to 29 months tied to the NWC's failure to enforce contractual remedies and provide timely responses to contractor claims.

 “These issues negatively impacted the timely and effective completion of critical watersupply improvement initiatives, highlighting the urgent need for improved contract-management practices and stronger oversight mechanisms,” she said.

 The AuGD report said management undermined the credibility of its capital budget and crippled board oversight by submitting incomplete and inconsistent financial reports between 2019-20 and 2023-24.

It said monthly project expenditure updates provided to the board excluded material and equipment supply contracts, capturing only works contracts instead. Furthermore, the NWC breached its statutory duties under the Public Bodies Management and Accountability (PBMA) Act, the report said, by failing to include mandatory explanations for cost variances and time delays in its quarterly reports to the portfolio ministry.

"This reporting breakdown left both management and oversight bodies without the comprehensive data required to allocate resources effectively, ultimately weakening accountability and stalling project delivery,” it said.

 Added to that, the report said the NWC did not get value for money when it spent US$3.6 million ($568.2 million) on a financial-management system that did not work effectively and had modules that remained partly ineffective due to ongoing system problems.

“NWC reported that it experienced significant implementation impediments, which resulted in incomplete financial records, persistent reconciliation issues, and inability to fully utilise all modules, including procurement, inventory management, and accounts payable. In December 2025, NWC engaged a new contractor at a cost of US$198,000 ($31 million) to address ongoing system deficiencies,” the document outlined.

 The NWC did not meet critical targets for revenue growth and operational efficiency for financial years 2019-20 to 2024-25 except for revenue growth target for FY2022-23 in breach of the PBMA Act, the Monroe Ellis report said.

 The legislation requires the submission of annual reports, including audited financial statements within four months after the end of each financial year.

 “This non-compliance undermines transparency and accountability and may adversely affect stakeholder confidence and regulatory oversight,” said the AuGD.

 For six consecutive years between the 2019-20 and 2024-25 financial periods, the audit report said the NWC did not meet critical targets for revenue growth and operational efficiency.

 It said in keeping with the PBMA Act, the NWC established KPls in alignment with its strategic objectives.

 However, the NWC did not meet KPI targets for operational efficiency, including energy efficiency and non-revenue water, over the review period. Further, apart from FY2022-23, the NWC did not meet KPI targets for revenue growth during the review period.

 “Although NWC had set targets to increase access to potable water to 74 per cent and sewerage services to 20 per cent of the population by financial year 2023-24, the Commission did not measure and report on these KPI outcomes.

 “Without sufficient performance tracking, progress towards these targets could not be measured,” said Monroe Ellis.

 Her report said subsequently, in November 2025, the NWC reported on the KPIs for access to potable water (75.4 per cent against a new 79 per cent target) and sewerage services (29.9 per cent against a new 25 per cent target) for financial year 2024-25 in its business performance and analysis report.

 Monroe Ellis has recommended that the NWC immediately establish a robust, formal prioritisation framework, using a weighted scoring model to select capital projects objectively.

 She said to ensure budget credibility, the NWC must cease planning internally funded projects around unrealised revenue and, instead, cap its capital expenditure envelope based on realistic cash-flow forecasts and confirmed funding sources.

 She also urged the NWC to implement a board-approved working-capital and payables-management plan to restore its quick ratio and reduce overall payables by 15 per cent.

 To eliminate project-delivery delays, the report underscores the need to ensure complete project readiness before mobilising any works contract alongside aligning procurement timelines to the budget cycle so that contracts are not signed without confirmed financing.

 Monroe Ellis further said the NWC must enhance corporate governance, accountability, and transparency by establishing unified contract-reporting routines, implementing rigid acceptance protocols for large IT infrastructure to prevent persistent system defects, and immediately clear its consecutive backlog of unsubmitted audited financial statements and annual reports.

  “Based on the evidence presented, there are significant concerns regarding the credibility of the NWC's capital budget…. Implementing the recommendations in this report would re-establish the credibility of NWC's capital budget and strengthen its delivery of the public services Jamaicans rely on,” said the AuGD.

kimone.francis@gleanerjm.com