'Devastating'

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'Devastating'

NWC cuts aid programme amid COVIDinduced $2-billion drop in revenue

BY KIMONE FRANCIS
Senior staff reporter
francisk@jamaicaobserver.com

Friday, October 30, 2020

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PRESIDENT of the National Water Commission (NWC) Mark Barnett says the fallout at the State-run entity from the novel coronavirus pandemic has been “devastating”, with a plunge of up to 40 per cent in revenue at one point.

Barnett was speaking to journalists at the commission's quarterly press briefing yesterday, during which he disclosed that there had been a significant reduction in the NWC's commercial customer usage, with scores of businesses — especially within the tourism sector — shuttering.

“So you can imagine going through a drought in COVID and a need for increased delivery of water, which, in our case, at the time, it would have been through trucking. So my trucking bill went through the roof and my revenue is going south. Therefore, it is unquestionable that we have been impacted negatively by COVID,” Barnett mentioned.

He said over the eight-month period, from the onset of the pandemic in March when the country reported its first case, NWC lost $2 billion in revenue.

The commission's president described the reduction in cash flow as “deleterious”, and said it has radically impacted operations.

He said, as a result, the NWC, while aware of the financial constraints being faced by customers, has had to discontinue its COVID-19 Assistance Programme.

Under the programme, residential and condominium customers who are behind in bill payments as at May 31, 2020, were eligible for a 30 per cent discount. Commercial customers could also benefit from a 25 per cent discount on outstanding balances.

“So we have to make adjustments in how we move forward and, therefore, that programme came to an end. We are now looking to ensure that our cash flow returns as closely as possible to where it was, knowing very well that that was, in itself, a challenge because of the wider economic impact that we are currently experiencing,” said Barnett, who added that the commission could not turn to the Government for assistance, as it, too, has been faced with financial challenges.

Additionally, the NWC president said the entity's collection level is hovering at 78 to 80 per cent, noting that the figures are “incredibly” low in terms of operating the business.

“It, therefore, gives you a sense of how we are able to address some of the challenges and even some of the demands that customers would be requiring in a timely manner. Water utility, like all other utilities that exist, is highly capital and requires high working capital to ensure that you keep operations going...

“Like all businesses, when your revenue and your cash flow from all your customers drop, it affects how your creditors are managed — meaning those regular accounts payable requirements — are also affected. And so you will find that it creates delays in getting certain things done,” he said.

“A reduction in my operating revenue definitely has a negative effect on my operational expense side by virtue of how I carry out, not just leak repairs, but everything else. It has to do with purchasing power; it has to do with how do you tend to things that are relevant to the enterprise but has no direct impact on water going through a pipe,” Barnett added.

He said the entity's aim is to be as forthright with customers as possible, noting that the NWC is not “immune” to the pandemic and how it has impacted the country.

As a result, he said the entity craves and encourages the patience of customers.


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