The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Water and Sewerage Corporation continues to endure COVID-19’s “devastating impact” on cash collections which have decreased by 24 percent or nearly $6m year-to-date, its executive chairman said yesterday.

Adrian Gibson, during his budget debate contribution in the House of Assembly, revealed that state-owned utility faces “unprecedented challenges” due to the continued sharp fall-off in customer bill payments.

He said: “COVID-19 has had a devastating impact on Water and Sewerage Corporation’s cash flow, as there was an overall decrease in cash collections of $11.5m or 19 percent from $60.8m in 2019 to $49.3m for the same period of 2020.

“There’s a decrease in 2021 cash collection by 24 percent, or $5.7m, from $21.4m year-to-date May, 2020 to $15.7m year-to-date in May, 2021.” 

Mr Gibson added that the “substantial reduction in cash collection” had also stemmed from Hurricane Dorian, which had knocked out the Water and Sewerage Corporation’s second most important revenue-generating market, Abaco.

He said: “The loss of Water and Sewerage Corporation’s second highest revenue generator in Abaco greatly impacted our cash flow. Abaco’s cash collection decreased by 80 percent, from $2.185m year-to-date in December2019 to $427,000 for the same period in 2020.

“Note also that in 2021 there’s a slight increase in Abaco’s cash collection from $90,000 year-to-date up to May 2020 to $207,000 year-to-date 2021.”  Mr Gibson added that this is “significantly less” than what Abaco collected historically, which averaged $1.3m by May annually. 

Blaming the decrease in cash collections on the halt to delinquent customer disconnections, due to the Government’s policy of maintaining water supply to consumers during the COVID-19 pandemic, Mr Gibson said this had resulted in a shortfall of customer revenue totalling $11.46m at end-December 2020.

“For the year-to-date, the shortfall given that directive from January to present day is about $1.5m,” he added. “The reduction in cash collection has resulted in an increase in Water and Sewerage Corporation accounts receivables, and our accounts receivables have grown from $38.7m in January 2020 to $45.5m in May 2021.

“This is an increase of $6.8m or 18 percent. The receivable balance outstanding to Water and Sewerage Corporation by government as of May 31, 2021, is $4.37m.” 

Mr Gibson said the increase in accounts payable has also harmed the Water and Sewerage Corporation’s cash flow. At end-May 2021, it had a total outstanding balance owing to vendors of $34.6m inclusive of $25.8m outstanding for “water purchases”. 

He added that the Water and Sewerage Corporation has reached a settlement agreement with Aqua Design (Bahamas) and is now looking forward to a “seamless transition” where the state-owned utility will operate its own reverse osmosis plants on San Salvador, Inagua, and south Eleuthera.