The Tribune

By NEIL HARTNELL Tribune Business Editor A NET 5,435 customers were disconnected by the Water & Sewerage Corporation for non-payment in 2011, data supplied to Tribune Business reveals, even though reconnections reached their highest level for five years. Information supplied to this newspaper by the Water & Sewerage Corporation, after it was requested, shows that some 16,945 clients - more than one-quarter or 25.7 per cent of its estimated 66,000 customer base - were disconnected at some point during 2011. It is unclear whether those disconnections were as a result of customers either being unable to pay, or simply not bothering to pay, their obligations to the Water & Sewerage Corporation, as several questions posed by Tribune Business were not answered prior to press time. However, the state-owned water and sewerage services provider also reconnected some 11,510 accounts in 2010, with the percentage of reconnections - as a proportion of disconnections - hitting a five-year high of 67.9 per cent. Effectively, this means a number equivalent to just over two-thirds of disconnected Water & Sewerage Corporation clients saw their service resume. However, the figures mean that close to 5,500 customers lost their water service in 2011 and did not have it reconnected, a figure similar to the Bahamas Electricity Corporation's (BEC) disconnected customers. Some Water & Sewerage Corporation clients may have chosen to drop its service, instead using their own private wells, but that is impossible to discern from the data. In any event, the figures again indicate the level of distress being experienced by Bahamian consumers and households, and their inability to meet bills, due to the economy. The previous year, 2010, also saw the Water & Sewerage Corporation disconnect a net 5,530 customers, with disconnections totalling 15,257 and reconnections some 9,727. Reconnections, as a percentage of disconnections, hit 63.8 per cent. The Water & Sewerage Corporation data provided to Tribune Business shows that reconnections, as a percentage of disconnections, have increased every year since 2007, an indication perhaps that Bahamian consumers are taking the continuation of water supplies more seriously. The reconnection percentage in 2007 was just 39.2 per cent, meaning that potentially over two-thirds of those disconnected that year did not have their service resumed. This improved to 48.3 per cent in 2008, then to 51.1 per cent in 2009, and ultimately to the 63.8 per cent and 67.9 per cent performances recorded for 2010 and 2011, respectively. The years 2007 and 2008 also saw the highest gross number of disconnections by the Water & Sewerage Corporation, reaching 21,441 and 21,270 respectively. Reconnections for those years stood at 8,415 and 10,266. Disconnections dropped to a five-year low of 14,025 in 2009, although reconnections did the same thing at 7,226. Yet disconnection numbers have started to creep up again in 2010 and 2011, indicating that the more the recession is prolonged, the more Bahamian households are feeling the pinch. An $81 million Inter-American Development Bank (IDB) loan project is designed to transform the Water & Sewerage Corporation's fortunes. Documents associated with the project graphically demonstrate its challenges. The IDB said: "Water & Sewerage Corporation does not have the autonomy to make the decisions needed to improve the service, due to inadequate corporate governance practices and lack of incentives, and it has insufficient revenues due to politically set tariffs at low levels. "In recent years, the Water & Sewerage Corporation has been unable to cover the costs of its operations, and the operational deficit has been between $10-$14 million. "As a consequence, the Government has had to provide transfers to Water & Sewerage Corporation of the order of $19-$28 million per year. Annual investments have been about $24 million per year. As part of its overall cost, Water & Sewerage Corporation also has significant overtime staff cost." The IDB report outlined what it described as "three principal deficiencies" in the water sector's "governance framework", which were the lack of autonomy for the Water & Sewerage Corporation's management; the incomplete and poor legal and regulatory framework; and a subsidy mechanism for the Corporation that was "neither efficient nor effective". "The poor operational and financial performances are linked with Water & Sewerage Corporation's poor governance framework," the report surmised succinctly. As for the Water & Sewerage Corporation's sewerage infrastructure, consultants had noted that just $2.3 million was spent on maintaining a system with a $162.5 million valuation in 2009, creating an operational and maintenance expenses to assets ratio of just 1.5 per cent. "Complaints by customers related to back up blockages and main leaks are large (427 in 2010, representing a high value of 2.1 per kilometre per year)," the IDB report said.