WASA needs $26B to improve its service says RIC

The Water and Sewerage Authority (WASA) estimates that it will need TT$26 billion by the year 2020 for capital investment to improve its service. Of that amount, about TT$16.5 billion will be needed for the water sector and TT$6.3 billion needed for institutional strengthening. These figures were contained in a document, “Review of the Status of the Water and Sewerage Authority,” done by the Regulated Industries Commission (RIC) and published in March this year. WASA’s overall deficit in 2002 was $456.4 million and its accumulated deficit at the end of 2002 was $5.8 billion, the RIC found, stressing that “radical changes are needed if the authority is to improve its performance.”

In its analysis of the company, the RIC said given WASA’s inability to cover its internally generated revenues, the authority has become increasingly dependent on Government-guaranteed loans and overdraft financing to fund its working capital needs. As of January 31, 2003, WASA’s long-term debt amounted to TT$2.48 billion and short- term loans, including overdraft, amounted to TT$619 million. Total interest payments on its long-term debt are expected to be $2.47 billion over the life of the loans. The interest that accrued over the life of the loans on overdraft facilities for 2002 was $8.55 billion, the RIC document said. On WASA’s capital investment, RIC said the authority’s “weak financial situation results in the inability to finance any capital investment from internal revenue.”

During the period 1995/1996 to 2001/2002 WASA spent approximately TT$1,594 million on capital investment, said the RIC, noting that this suggested that on average TT$228 million was spent on capital investment. The RIC noted that the authority’s existing tariff structure does not meet the criteria for economic efficiency, noting that low tariffs have done little to benefit poor and low income families “with no service or inadequate service for these groups. The RIC concluded that it is clear that “WASA’s operational efficiency and financial performance is well below the internationally accepted level for a well-performing water utility.”