WASA without ideas

The EDITOR: WASA’s new strategy to collect outstanding monies reveals an administration bereft of ideas to deal with the country’s economic contraction.

Even if the utility could collect $500 million in unpaid rates, this would only mean that the Government would still have to fork over at least $1.5 billion in subsidies, which is the price taxpayers pay for WASA’s inefficiency and, most likely, corrupt practices. In 2015, the subsidy for WASA was just under $2 billion; and over 60 per cent of the potable water produced by WASA is lost through leakage, compared to a 40 per cent leakage rate in most developing countries. So Public Utilities Minister Robert Le Hunte’s claim that “the price of water in T&T is the lowest in the Western hemisphere” is, at best, disingenuous.

It may be argued that the cost of water is spread out across all taxpaying citizens so that the least well-off in the country could still get potable water at no charge.

This, however, is simply not true.

First of all, since water is supplied below market cost, it is obvious that the haves benefit far more than the have-nots, since the former use much more water than the latter. Indeed, at least one of the haves has built a multi-million-dollar business using the below-cost water supplied by WASA. Only six out of ten households get a 24/7 supply of water, so poor people who do not have a pipe-borne supply end up buying this same bottled water, or have to buy tanks, or have to go to the nearest stand-pipe and fill containers which, in time alone, is also a cost. In effect, this constitutes the poor subsiding the well-off.

If the Government really wants to reduce its expenditure and make WASA more efficient, it will explore privatisation options. There are several models the Government can consider to achieve these broad ends: (1) renting WASA’s infrastructure to a private firm, which has responsibility for upgrading and maintenance but a free hand in setting prices; (2) contract a private company to fix WASA’s infrastructure, which the company then leases for a set period; (3) rent the infrastructure on condition that certain targets – eg, connections, leakage reduction – are met. These by no means exhaust the possible options for privatising TT’s water supply.

The unthinking objection that privatisation would deprive the poor of an essential commodity holds no water. For one thing, it may be that a private company would find it profitable to ensure that it connected poor households, depending on the rates the company needed to charge to make money. But, even if those rates were more than a poor household could afford, the company could charge those households a lower rate. Failing that, the Government could include a clause in its contract with the company mandating that households below a certain income level be connected at no cost, with the Government footing that bill by a system such as water vouchers.

Whatever the cost of that subsidy, it will certainly be much less than $2 billion. In fact, the evidence shows that most countries which have opted for water privatisation have reduced the costs of water supplied to the poor.

This is the approach a serious administration would be considering. WASA’s threat to seize the properties of errant customers is quite empty and will only add to the utility’s expenditure in placing pointless advertisements.

Kevin Baldeosingh, Freeport