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Down-lights of the National Water Commission

Published:Sunday | June 29, 2014 | 12:00 AM

A.C. Countz, Guest Columnist

The persons responsible for National Water Commission (NWC) are: Minister Bobby Pickersgill, Chairman Prakash Vaswani, President Kingsley Thomas, and directors Marjorie Fyffe-Campbell, Gavin Goffe, Senator Wensworth Skeffery, Eugene Kelly, Hugh Graham, Paul Williams, Garfield Knight and Rev Naggie Sterling.

The president and board were newly appointed in April 2014.

The NWC was in tragic financial condition in 2012, the last accounts seen, for example:

1. It lost $2 billion in the year to March 2012. Current budget documents disclosed a loss of $6 billion in 2013/14 and a budgeted loss of $3.5 billion in 2014/55 - See previous article:

2. Its liabilities exceed its assets by $1.4 billion.

3. It owes $17 billion in long-term loans.

4. Its pension scheme appears underfunded by $15 billion. This includes $11 billion under the Pensions (Parochial Officers) Act and $652 million to NWC Pension Scheme.

5. It has not published accounts for 2013 nor 2014. What are the reasons for this extensive delay?

6. There is a shortfall of funds deposited to BNS in connection with K-Factor charges of $280 million.

7. Some 80 per cent of receivables from consumers are over 90 days overdue. Total due, net of provisions, from consumers grew by 70 per cent in 2012.

8. A provision for bad debts went up $1.9 billion in 2012. Impaired (bad?) collections now amount to almost 80 per cent of all consumer receivables. Government entities owed NWC $255 million.

9. Non-consumer receivables amount to $401 million before applying a provision of $295 million - an increased provision of $44 million in one year.

10. NWC provided in full for its equity investment in Central Wastewater Treatment Company Limited. Shareholders in July 2011 were UDC, NHT, NWC (appears to have owned 7.4 per cent), Ministry of Housing and Ashtrom Jamaica Limited. The directors were Lennox Elvy, Joy Douglas, Philip Bernard, Akiva Schiff, and Martin Miller.

No accounts have been seen, but in 2011 the company appears to have owed at least $3.2 billion.

11. Its investment in Air Jamaica bonds of $531 million appears to have been repaid or taken off balance sheet in 2012. Why on earth would a company in such condition make that investment?

12. The Ministry of Finance has waived $151 million of fines for late payment on income tax and disputed supplier invoices amounting to $753 million - not provided for in accounts.

How can the finances of such a large and important government company be in such bad shape?

Unless there has been a stupendous turnaround since 2012, the NWC should be privatised or thrown into receivership. Its financial and operational management leaves much to be desired.

This current board was newly elected so cannot be held fully responsible for the incredible mess.

If this board does not take immediate action to improve the way in which the NWC is run, then consideration should be given to have the NWC regulator, the Office of Utilities Regulation, declare board members as unfit persons to serve on any public entity in Jamaica.

Maybe consideration should now be given to so label past board members and management who controlled NWC during its slide into chaos.

Current efforts to stabilise the national economy will not work if large public companies are allowed to fall into this kind of financial condition.

The public need to hear from the minister, the chairman and the president about the needed push for greater accountability and also their plan to turn around the NWC.

The water agency needs to be thrown into receivership or privatised. Possibly a commission of enquiry should be established to determine why the NWC has fallen into such dire circumstances and what is its plan to cut water wastage, establish viable consumer charges, cut possible corruption, and refinance the company either by privatisation, or the Government of Jamaica putting in more funds?

We await proposals from new president, Kingsley Thomas.


  • Who cares about accountability?

We are grateful to the Cabinet Secretary for his recent letter - he took more than six weeks to reply - informing us that the Cabinet has not published an update to its 2010 report listing the latest periods for which public entities had produced annual reports.

There are hundreds of public entities and it appears that no one in government keeps track of when each entity produces, much less makes public its operational and financial results.

There appear to be no sanctions for this slackness.

If the Cabinet has no interest in this matter, then Minister Phillips or EPOC might want to do something? Why do we have to wait for the IMF to tell us what to do?

This column reviews the audited and in-house accounts and reports of companies and entities owned or influenced by Government.

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