PAC questions NWC’s financial viability

Auditor General Pamela Monroe Ellis has disclosed that as at March 2026, total receivables of the National Water Commission (NWC) is $23.88 billion. However, eyebrows were raised when it was highlighted that of the nearly $24 billion in receivables, the NWC has made provision for bad debt in the sum of $19.3 billion.

Provision for bad debt is an accounting estimate of the portion of accounts receivable that a company expects customers will fail to pay.

This disclosure triggered concerns by Christopher Brown, a member of the Public Accounts Committee (PAC), who questioned the viability of the NWC.

Monroe Ellis said that of the $23.88 billion, the sum owed over 90 days is $20.89 billion; 60 to 90 days is $820 million; 30 to 60 days is 880 million; and under 30 days is $1.2 billion.

Chairman of the PAC, Julian Robinson, argued that no entity, public or private, can operate commercially when 85 per cent of its debt was at risk of being written off.

At the same time, the NWC continues to struggle to reduce non-revenue water (NRW) nationally as the company missed its key performance targets for the periods 2019-2020 to 2024-2025.

For example, in 2023-24, the NWC set a target of 68 per cent, but the actual outcome was 71.8 per cent, while for the following period of 2024-25, the NWC set a target of 70 per cent, but the outturn was 72 per cent.

However, targeted programmes in Kingston and St Andrew and Portmore have seen losses in NRW reduced to between 38 and 40 per cent.

Referencing her 2014 audit of the NWC, Monroe Ellis said: “Over the period 2008-09 to 2013-14, NWC produced 390 billion imperial gallons at a total cost of $354 billion. Over the same period, the NRW was 270 billion imperial gallons.” This meant that nearly 70 per cent of the total water produced by NWC was non-revenue water.

The 2014 audit showed that the NRW amounted to $245 billion.

FAILED TO MEET TARGET

Brown noted that each year, the NWC made revenue projections but had failed to meet those targets.

“At the end of the day, it has implications for the expectations of the country as it relates to these announced projects, and they are not happening,” Brown said.

Chief Financial Officer at the NWC, Fabian Christie, said the entity has been improving in terms of its collections.

He said since 2021, the company has been collecting 81 per cent of what it has billed, noting that this has moved to 87 per cent at present.

Highlighting the difficulty in receiving payments from customers, Christie said the NWC’s bill is usually last on the list of payments to be made by consumers.

Christie conceded that the NWC will require “a lot of assistance”, noting that 70 per cent of the company’s aged infrastructure should have been replaced already.

He said it is estimated that the NWC would need about $25 billion annually to spend on projects over the next 10 years to take the infrastructure to an acceptable level.

According to Christie, the NWC is in need of a tariff increase. However, he said this would not be able to sustain the company’s operations because of the magnitude of the sum that is required. “The customers alone cannot pay that amount, and so we are going to require assistance from the Government of Jamaica,” he said.

edmond.campbell@gleanerjm.com