THIRSTY FOR CASH - NWC seeks massive rate hike, warns of investment cuts without it as debts mount

The Office of Utilities Regulation (OUR) has confirmed that it received an application from the National Water Commission (NWC) for a 51 per cent increase in tariff over a five-year period.

The NWC’s senior management told a meeting of the Public Accounts Committee (PAC) at Gordon House on Tuesday that the utility had applied to the regulatory body last Friday, putting its approximately 500,000 customers on notice.

In a release yesterday, the OUR said the tariff application covers the period 2026-27 to 2030-31.

The OUR advised that in accordance with its established process, it will conduct an initial assessment to determine whether the application meets the requirements for a tariff review, both in respect of form and content.

Where necessary, the regulatory body said it may request additional information from the NWC before deciding whether to formally accept the application for review. This decision, it said, would be conveyed to the NWC within 10 days.

NWC Acting President Kevin Kerr told the PAC that the company’s investment plan was aligned with its tariff submission.

He said the company is seeking to secure the requisite financing to carry out its priority initiatives.

The NWC has said the tariff increase would enable the company’s revenues to cover its expenses.

The last time the NWC was granted a tariff increase by the OUR was in 2019.

Chief Financial Officer Fabian Christie said the company’s revenue collection performance has deteriorated over time.

The utility company indicated that if the 51 per cent increase in tariff is not approved, the NWC would have to revise its investment plan.

Christie said the company currently has $32.2 billion in payables, including $21 billion in General Consumption Tax (GCT) owed to the Government, $6 billion owed to suppliers and contractors, and another $6 million to be paid to a wastewater treatment company.

The company’s payables have tripled over the last 10 years, prompting further questions about its viability and the steps being taken to improve its financial position.

NWC officials admitted that the company has been using the GCT it collects to support its daily cash needs.

Kerr also told PAC members that the company would select a bidder by the end of the financial year to carry out an islandwide programme to significantly reduce non-revenue water (NRW).

NRW refers to treated water that does not generate any financial income because it is lost through theft and leaks, is unregistered on faulty meters, or is unbilled before reaching customers, such as water supplied through fire hydrants.

Kerr said the plan is to start the programme in Spanish Town and Old Harbour in St Catherine and then move on to Mandeville, Montego Bay, Negril, and back to Kingston, St Andrew, and Portmore.

The NWC’s head said the company is aiming to meet a 2035 target of reducing NRW to 30 per cent across the country. Currently, NRW averages between 70 and 73 per cent islandwide.

At the same time, Permanent Secretary in the Ministry of Water, Environment and Climate Change Wayne Robertson said the Government recognises that, to improve the NWC’s viability, a holistic approach is needed to overhaul the utility.

He said a presentation would be made to Cabinet shortly to make significant changes to the NWC.

“I can assure the people of Jamaica that once and for all, a holistic approach will be taken to reform the NWC’s financing architecture,” he added.

The PAC was reviewing the Auditor General’s Department’s performance audit report on the NWC’s effectiveness in managing projects, among other things.

edmond.campbell@gleanerjm.com