Bottled water producers are somewhat sceptical about the Water and Sewerage Authority’s (WASA) ability to deliver on its latest proposed commercial venture, but find it “encouraging” that the state agency is seeking alternative forms of revenue generation.
Newsday reported yesterday that Public Utilities Minister Robert Le Hunte said WASA was considering entering the retail business, selling bottled water as an additional revenue stream to offset its multi-billion-dollar revenue shortfall. The state agency receives nearly $2 billion in government subsidies to cover its expenditure – despite having the monopoly on the management, distribution and sale of water resources.
“I want to commend the minister for encouraging WASA to think about ways to reduce the subsidy without necessarily raising prices,” said Blue Waters Products managing director Dominic Hadeed said. Hadeed said his company is not afraid of competition, but WASA already had a better business model than he has: while he faces off against multinationals and local firms for market share, WASA has a monopoly.
“I’m sure when they run their numbers they will realise (bottled water) not as profitable and that they have better business,” he added. Caribbean Bottlers TT Ltd, which produces Dasani, had similar sentiments. “We appreciate the challenges that WASA finds itself with regard to revenue generation. It is actually encouraging that the state enterprise is considering other sources of revenue other than increases in water rates,” Caribbean Bottlers said in an e-mail to Newsday. The company said it would not have an issue with an additional player in the industry. “We will continue to provide products so consumers can have options,” the company said. Blue Mountain Water managing director Prem Badaloo was a bit wary of the State tackling retail. “I don’t think WASA has the resources or management to do a project like that. Water is only one component of the product.
“I don’t think they can sell it down the line. Someone at WASA does not really understand what is involved,” Badaloo said. The government has always shown a poor ability to manage business, he added, and he couldn’t see why this would be any different.
Bottled water is a notorious source of plastic waste, but Hadeed did not think WASA’s entering the fray would lead to an increase in plastic-bottle production, since the market size would remain the same. Badaloo said Blue Mountain has a recycling programme for customers who choose its home delivery service.
WASA is already in the bottling business in a sense, though: since it is the only legal “owners” of the country’s water, bottled water companies still have to pay WASA for water. Blue Waters gets its water from a natural well, but must get a licence to use it, and must pay WASA a royalty. Blue Mountain, based at the foot of the Northern Range, pays for its water by the gallon, sourced from WASA’s North Range catchment area; and Dasani sources its water locally from a combination of artesian well water and the municipal supply.