Samuda: Corrective action under way after audit highlights NWC weaknesses

Water Minister Matthew Samuda says the Government accepts findings of an Auditor General's performance audit flagging some institutional weaknesses at the National Water Commission (NWC), noting that corrective action is already underway. 

In a statement issued Wednesday, Samuda acknowledged the audit's identification of "several areas requiring urgent attention," including weaknesses in capital project prioritisation, procurement timelines, contractor management, reporting systems, liquidity pressures, and a longstanding backlog in audited financial statements.

"The Government accepts that the institutional weaknesses identified in the audit must be corrected," the minister said. "Public confidence in the water sector depends not only on investment in infrastructure, but also on strong management systems, disciplined project execution, and timely accountability."

The statement followed Tuesday's tabling of the audit report in the House of Representatives, which laid bare the scale of the NWC's financial and operational difficulties.

The audit, among other things, revealed that the utility is carrying a staggering $33.2-billion debt to suppliers, up from $10.6 billion a decade ago, and that for every dollar owed in short-term debt, the NWC holds only 50 cents in cash.

The financial strain is compounded by a severe collection problem. The NWC has written off $18.3 billion as unrecoverable bad debt and expects to collect only $4.6 billion from customers.

Auditor General Pamela Monroe Ellis found that the NWC systematically underspent its capital budget in four of five years under review, deferring or scaling back critical infrastructure upgrades with direct consequences for public service delivery.

"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.

The audit also found that 58 per cent of audited contracts, 29 of 50, ran late, with delays ranging from three months to two and a half years, driven by contractor underperformance, unresolved land access issues, slow approval of variation orders, and delayed fund disbursements.

Samuda said the findings, while serious, must be assessed alongside “broader operational and economic realities” that significantly affected the NWC during the period under review.

He pointed to the COVID-19 pandemic as a key disruptor, noting that it caused widespread contractor delays, workforce shortages, supply chain disruptions, and contract variations across multiple projects. He also cited global shipping and commodity price spikes, severe drought conditions, and rising energy costs as compounding pressures that affected utility operations worldwide.

The minister further highlighted the contraction of Jamaica’s tourism sector during the pandemic period, saying it materially reduced water consumption revenues from a major commercial customer base and further strained the NWC’s cash flow position.

“These combined shocks affected infrastructure programmes and utility providers globally and were not unique to Jamaica,” Samuda said, adding that corrective actions were being undertaken in several areas before the audit report's publication. 

On the backlog of audited financial statements flagged in the report, he said the Finance Division has committed to clearing outstanding submissions “in the shortest possible time”.

The minister also pointed to ongoing reform efforts, including the development of strategic master development plans for each region to anchor capital project prioritisation, and directives to incorporate price adjustment provisions in contracts to address cost volatility.

"Over the past five years, more has been invested in water infrastructure than in the past 40 years," Samuda said, adding that approximately 70 per cent of the NWC's infrastructure is over 40 years old. 

Samuda said the ministry will maintain close oversight of implementation, working with the NWC board and management to ensure that all recommendations are acted upon within defined timelines.

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