The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

AUDITS show that the Water and Sewerage Corporation continues to function with significant operating losses, recently accumulating a deficit of $147 million, according to the latest reports tabled in the House of Assembly yesterday.

The reports show, however, that the performance of the company has improved significantly in the past five years with respect to reduction of the non-revenue water (NRW) that is produced in New Providence, a key financial issue for the company.

Leader of Government Business in the House of Assembly Dr Bernard Nottage tabled the reports for 2012 to 2015 yesterday.

It’s the first time this term that the government has tabled these reports even though officials are required by law to table them annually.

The 2015 report, prepared by Baker Tilly Gomez, said: “The corporation has incurred significant operating losses in recent years and further losses are projected for the future. As at December 31, 2015, the corporation’s current liabilities exceeded its current assets by $26,424,745 and it has an accumulated deficit of $147,048,897. “The corporation is dependent on funding from the government and it is anticipated that such funding, via government’s subsidy, will continue to be made valuable at a level to allow the corporation to adequately maintain its operations. In the fiscal year 2015, the corporation received $24,684,167 from the government of the Bahamas in the form of a subsidy to assist with the cost of operations.”

Although average staff costs remain a financial issue for the corporation, WSC blames its financial problems primarily on “low” tariffs, which it says are “well below cost recovery levels.”

There hasn’t been a tariff increase on WSC’s services since 1999.

In its 2012 report, the corporation said the “tariff is outdated and too low” for it to cover its “reasonable operating costs.”

The low tariff demands regulatory reform, WSC says, although it is unclear if such reform is anticipated given the political sensitivity of the matter.

Despite such challenges, the corporation’s reduction in NRW meant that the WSC’s pre-subsidy loss in 2015 was “15 per cent lower than in 2014.”

“Over the past decade, WSC’s financial performance has gradually worsened and pre-subsidy loss has grown each year (with the exception of 2009),” the corporation said, adding: “This downward trend was arrested in 2014.”

“NRW is the difference in the amount of water supplied and the amount of water billed to consumers. High levels of NRW lead to the need to increase the amount of water produced/supplied and to higher operating expenses.”

In 2013, Miya Water, a company with expertise in water efficiency solutions, began implementing a strategic plan to reduce NRW in New Providence over a period of ten years.

“The initiative has already resulted in over 2.5 billion gallons of water being saved, which in turn allowed a significant reduction in water production/ supply while meeting increased demand,” the corporation said. “The reduction is an important achievement since NRW greatly affects our financial performance. NRW decreased from 9.1 million imperial gallons per day in 2012 (56 per cent of water supplied) to 5 million imperial gallons per day (37 per cent of water supplied) in 2015.”

In addition, in the period covered by the audits, WSC has experienced a reduction in complaints, decreasing from 8,413 in 2012, to 7,428 in 2013 to 6,102 in 2015.

Some aspects of WSC’s operations have been less impressive than NRW and complaints reduction over the past five years, however.

For instance, despite a desire to reduce the company’s “employees per active water connection” rate to “5 staff per 1,000” by 2018 in order to improve productivity, the corporation’s staffing level has remained mostly stagnant over the past five years, with the corporation reporting “7.4 staff per 1,000 active water connections” in 2015, up from 7.1 per 1,000 in 2012.

“This will be addressed as we continue to implement our organisation restructuring strategy though it may require short-term increases in the number of staff,” the corporation said.

The corporation has also continually failed to meet its target of addressing 95 per cent of complaints within 48 hours.

“In 2015, we addressed the following percentage of the complaints we received within 48 hours,” the corporation said. “Seventy-eight per cent of water leak complaints, 53 per cent of other water complaints, and 85 per cent of sewer complaints.”