Approximately 408,000 of the Water and Sewerage Authority’s (WASA) residential customers may have to dip deeper in their pockets to buy water meters at a price tag of $3,000 to be installed at their homes.
With dwindling revenue streams and the economic fallout from the COVID-19 pandemic, Government may not be in a position to outfit WASA’s residential customers with meters.
The purchase of meters will cost a collective $1.2 billion, as the authority moves to transform the cash-strapped organisation.
It is unclear when WASA will implement this new measure, but the nationwide exercise is inevitable, WASA’s executive director Dr Lennox Sealy said recently.
Asked if it may come down to residential customers buying their own meters, Sealy responded, “yes, I would like to do that…so that burden of buying thousands of meters dissipates.”
In a face-to-face interview with Guardian Media at his St Joseph’s office, Sealy described WASA as “a risky business” with ageing infrastructure which would require critical thinking to navigate in the coming months.
Questioned if metering was a priority for the authority at this difficult time, Sealy said “in many countries…people pay for their own meters. So, that is the first thing we have got to realise. We are talking about an outlay but that has to be covered by the resident, that is my position on it.”
A meter roughly costs $3,000, Sealy said.
“It is less than a cellphone. What would be, perhaps, the major cost is more the installation…you know, the labour for installing and so on. Eventually, the country would have to go there.”
In the December 2020 sub-Cabinet report into the operations of WASA, chaired by Public Utilities Minister Marvin Gonzales, metering was scheduled for critical action.
The report stated that the authority will procure the services of International Water Management expertise under a Performance-Based Contract/s (PBC) using the services of an independent technical team and transaction advisers.
The main target of the PBC would be to increase a 24/7 water supply, modernise leak repairs and “installing customer meters” while updating WASA’s customer database and replacing service connections for simple lock-off of supply, the report further stated.
Since assuming the role in February, Sealy admitted that several issues have been weighing heavily on his mind which required tough decisions at the Board and Cabinet levels.
Only three per cent of the 421,000 residential customers metered
Metering will help WASA measure how much water consumers use and consumers will be billed based on how much water they utilise.
The main benefit of metering is to help conserve water.
It is averaged that each citizen utilises 81 gallons of water per day or 267 gallons per household.
Sealy said only three per cent of WASA’s 421,000 residential customers have been metered so far. It would cost the remaining 97 per cent or 408,000 unmetered residential customers in excess of $1 billion to be outfitted with meters.
Approximately 90 per cent of WASA’s 423 industrial customers have been metered.
WASA also has a database of 8,869 commercial customers many of whom have already been hooked up to meters.
Sealy said customers who have invested in meters pay far less for water due to WASA’s low tariffs.
“Since I have been here I have requested a meter. So, you do have people who want metres. It is something I would like to see on the cards.”
The 2019 report
A 2019 report on the Scope and Implementation of an Action Plan for WASA had proposed a universal metering exercise.
The report stated that funding would have been provided through a multi-million dollar Inter-American Development Bank loan followed by the selection of a contractor with knowledge in metering for both domestic and non-domestic customers.
But this plan got stuck in the pipeline and was never implemented.
Sealy also weighed in on a recent 71-page report entitled “WASA-cost reduction, revenue enhancement and regularisation-The employees’ Perspective” which highlighted 57 cost-cutting measures based on recommendations put forward by its employees, businesses and concerned citizens to turn WASA around.
A committee was appointed to examine the report and find ways to trim the authority’s fat.
“So far, we have identified $36 million dollars in savings and that is going to go over and benefit us coming into the next fiscal year,” Sealy said.
WASA has already begun to reduce its wanton spending.
“We were paying T&TEC for areas that we have not been using since 2009. We have a lot of software licences that we are not optimising. We have purchases we can stop without making a significant difference to the operations. There were some people (workers) who had cars and phones being paid for by WASA that we have removed,” Sealy said, outlining some of the cost-cutting initiatives already undertaken.
Removing the middle man
One of the recommendations in the report was that WASA should “remove the middle man” when purchasing goods and buy directly from manufacturers.
Having examined bills for chemicals, Sealy said he wondered why WASA has not been purchasing directly from suppliers.
In the interest of the taxpayer, Sealy said, “I think we need to do a lot more of that…look at public/private options.”
Sealy said his primary concern was to provide a reliable supply of water to deprived communities.
“Right after that is the condition of our network. We have been talking to the international community about loan funding. We are speaking right now to the IDB about a number of improvement initiatives for WASA which I am pushing hard to advance. We are definitely going to have a capital expansion programme. I am talking to the RIC. I can’t say much more about it now…of a different way of doing the rates so that you actually have the fund for maintenance.”
He said WASA was working to get its rates improved.
WASA’s tariffs have not increased since 1993 and are said to be the cheapest in the Caribbean. The average household pays $3 a day. Residential customers are charged $1.75 for 220 gallons of water. The regional benchmark is $US1 per cubic metre.
While previous WASA boards had embarked on an aggressive disconnection drive to get delinquent customers to pay their outstanding bills, Sealy said it costs WASA $312 to disconnect a customer.
“But it costs much more to reconnect. So, even if you go on a disconnection drive…you are driving to lose money. So the economics…that is the situation that we are in. So, we have to find ways out of that.”
In the last disconnection drive, Sealy said WASA was owed $51 million but only netted $5 million from bad paying customers.
Vowing to put WASA’s house in order, Sealy spoke about one particular company that pays WASA $120 a month for 6,600 gallons of water using an extraction licence.
“It’s not a financially feasible operation. At today’s rates changes have to come if WASA is to survive. WASA has to come up with new ways of doing business.”
Sealy said it was disheartening to hear recent reports that people who were disconnected had used a WASA key to turn their water supply back on.
Unverified claims by contractors
Questioned how WASA intends to settle its lingering debts to contractors, Sealy said having sat with top management they have worked out “a bit of a matrix” to deal with payments.
“That is all we can do with limited funds. It is not always working as it should but we do have a plan. At some time, I believe we would reach a crunch point where we have to make some big decisions. But those decisions will have to be made at a higher level. But I know I will have to present a case. After some date, that is it. We would need to liquidate this debt, liquidate that debt…and so on. That is the road we are marching down right now.”
Sealy admitted that a lot of the contractors’ claims are “unverifiable or have not been verified.”
So how much does WASA owe contractors?
“We are in the vicinity of about half a billion (dollars),” Sealy said.
“If someone knows they are not going to get paid you inflate or you do what you have to do.”
Some contractors have also taken WASA to court.
In a few of the cases, Sealy said, WASA has “negotiated downwards. So, I think we have been fairly successful in negotiations but it cannot continue like that. We know we are facing an uphill battle. There are some systemic issues.”
For years, Sealy said, WASA has been blamed for not repaving roads after repairing ruptured pipelines. He said there was a memorandum of understanding with the Ministry of Works and Transport which never worked.
“It has always been a toss-up whether WASA should have its own repair crew with asphalt and everything if you want to put back the road or let the ministry who has the expertise and materials do the job. So we are still wringing our hands…”
Last Thursday, Cabinet appointed two commissioners, senior executive Devati Mooleedhar and attorney Celeste Jules on WASA’s board to support Sealy in turning WASA around.
Sealy said WASA’s cost of services far outweighs the revenues collected.
“That is why we are in a deep financial hole. We have not been imaginative enough in terms of how we structure the approach in dealing with water.”
He likened WASA to someone who has been ill for a long time.
“You cannot give them ten different medicines at the same time,” stating he wished he had “a magic wand” to take WASA out of its dysfunctional state.