The officials of the National Water Commission (NWC) simply don't get it. You can't seek a rate increase when you are failing to demonstrate some level of efficiency in your operations. It's just not on.
Readers will recall that late last year, members of the Public Administration and Appropriations Committee (PAAC) of Parliament scolded the NWC for wanting to increase rates while sitting on more than $8 billion in loan funds provided for service improvements islandwide.
The country heard, through PAAC member Mr Mikael Phillips, that the NWC had spent only $2.5 billion, or less than 20 per cent, of the $10.7 billion it had acquired to complete 11 projects in its 2012/13 capital programme.
So, Mr Phillips, quite correctly, slammed the NWC for seeking a tariff review when it was not doing the things that it should to bring in additional revenue, including expanding its service into more rural communities.
After that PAAC meeting, we had expected that the NWC would have made some attempt to address the concerns aired. However, we are not aware of any move in that direction.
What we have clearly seen, though, is the NWC throwing those concerns back in the face of the PAAC and, ultimately, the people of Jamaica, by contracting a foreign firm to prepare a rate increase submission to the Office of Utilities Regulation (OUR).
The cost of this to taxpayers? — $26 million!
We would not be surprised to learn that this spend has erased any support that the NWC had for a rate increase. For it smacks of a total disregard for the economic difficulties being experienced by the country.
We must agree with Dr Horace Chang, the Opposition spokesman on water, that this $26 million would have been better spent on improving the NWC's procurement and implementation capacity and to speed up K-factor-funded projects.
The K-factor, you will recall, is a programme that the NWC says it will use to generate funds to finance specific types of projects, such as reducing the level of non-revenue water; rehabilitating/retiring selected waste water treatment plants; and expanding the sewer collection network in Kingston and St Andrew.
However, the NWC has been telling us that it has been losing billions annually to theft and fraud. In fact, during that PAAC meeting late last year, it was revealed that only 32 per cent of the water distributed by the NWC is paid for, as the other 68 per cent is shared between water lost to leaks and the quantity that is stolen.
We accept the NWC's argument that water rates are relatively low in Jamaica. We also acknowledge that it is very expensive to produce and distribute the commodity. However, we cannot support the commission's campaign for a rate increase at this time, given that the NWC remains inefficient.
The OUR, we hold, should dismiss the rate increase submission and tell the Water Commission in plain language that no consideration will be given to an application until serious measures to improve efficiency are implemented.
We reiterate that we would not be surprised if the NWC, after tightening its operations, experienced some form of liquidity.