Water hike faces fire - Businesses, tourism sector and Opposition challenge proposed 51% NWC rate increasee

Several stakeholders including small and large businesses are pushing back against the National Water Commission’s (NWC) proposed 51 per cent tariff increase, urging the regulator to withhold approval or impose conditions amid drought-related shortages, rising operating costs and concerns about the utility’s management of water resources and infrastructure.

Garnett Reid, president of the Small Businesses Association of Jamaica (SBA), said many operators were still struggling to recover from Hurricane Melissa, with some awaiting insurance payments for property damage while facing the added expense of securing alternative water supplies.

“I understand that it is a recommendation and the OUR is looking at it but we are giving them notice, both the Government and the OUR, not to grant an increase to the NWC at this time,” he stressed.

Reid said the ongoing drought had compounded the challenges facing small and medium-sized businesses, some of which have been forced to pay between $10,000 and $20,000 for a truckload of water.

“We are now experiencing a drought where small and medium-sized businesses are suffering where water supply is concerned,” he said, adding that the cost of purchasing water was placing a significant burden on operators.

Water restrictions have also forced some businesses to reduce production or suspend services, further undermining their ability to recover financially.

“I know a lady, she makes shampoo and because of the water supply restrictions she had to cut back on production. Restaurants have to close sometimes and the hairdresser can’t do the hair to make money and the list goes on,” Reid said.

He argued that the NWC’s financial difficulties were partly the result of years of failure to address ageing infrastructure, which contributes to substantial losses through non-revenue water.

During Tuesday’s sitting of Parliament’s Public Accounts Committee (PAC), NWC officials said non-revenue water losses averaged between 70 per cent and 73 per cent across the country.

Reid called for changes to the NWC’s management team, arguing that the utility needed to improve its financial performance before passing additional costs on to customers.

SEEKING ALTERNATIVES

Emile Leiba, president of the Jamaica Chamber of Commerce, also objected to the NWC passing additional costs on to customers, arguing that alternative sources of funding should be explored.

“If there are greater needs of the NWC than they are currently able to manage based on existing budget, I think the better course is to look for funding elsewhere, rather than passing that on to the companies and individuals who may not be able to afford a significant increase in the water rate,” he said.

Leiba said if the OUR approves the increase, it should be phased in and applied equitably.

He noted that water was an essential input for many businesses, particularly those dependent on it for manufacturing and other daily operations.

“There are some businesses that are very dependent (on water) in their operations, in their manufacturing processes and so on. So in the current inflationary environment, you certainly need to look very closely before you put up input costs significant for any business or individual,” Leiba said.

TOURISM CONCERNS

The Jamaica Hotel and Tourist Association (JHTA) has also questioned the scale of the proposed increase, calling for greater clarity on how it would affect different categories of customers and what improvements would follow.

The association acknowledged the importance of reliable water supply to households and businesses, as well as the NWC’s need to invest in infrastructure and maintain financially sustainable operations.

“The JHTA recognises that reliable water supply is critical infrastructure, both for our sector and for every Jamaican household and business, and we understand the NWC’s need to invest in system upgrades and to place its operations on a sustainable financial footing,” the association said.

“That said, a 51 per cent increase is significant, and at this stage there are more questions than answers.”

The JHTA said it wanted to understand how the increase would apply across the various customer categories and rates, particularly to hotels and attractions, which are among the NWC’s larger commercial users.

It also wants details on the improvements customers could expect in service reliability, water quality and the reduction of system losses, including the timeframe for delivering those improvements.

The association said it was aware of the presentation made by the NWC to the PAC and looked forward to meaningful consultation with the utility.

OPPOSITION SEEKS CONDITIONS

Ian Hayles, the Opposition spokesman on water, has also urged the OUR to withhold approval of the increase until the NWC demonstrates that it is managing the country’s water resources properly.

Hayles pointed to inflation of 8.6 per cent, the additional costs faced by families purchasing water from private truckers and reports of customers being billed for supplies they did not receive.

He said the NWC’s application should not be considered until the state-owned utility submits its outstanding audited accounts and presents a credible plan to reduce non-revenue water losses.

Hayles also wants the NWC to publish a national water master plan outlining the criteria used to select projects, with quarterly progress reports tabled in Parliament.

Among the other measures being proposed by the Opposition are an end to billing customers who are not receiving water, a flat rate for pensioners and a social rate for households using up to 2,000 gallons a month.

The objections come as the NWC seeks approval for a substantial tariff adjustment, with business groups and the Opposition calling for greater accountability and assurances that any increase would translate into more reliable water supplies and improved service.

editorial@gleanerjm.com