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Saunders: We can no longer sustain the shortfall

Saunders:  We can no longer sustain the shortfall

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General Manager of the Central Water and Sewerage Authority (CWSA) Garth Saunders earlier this week in great detail gave justification for the increase in rates by his organization.{{more}}

During a press conference held at the company’s New Montrose headquarters on Tuesday, January 18, Saunders highlighted a number of projects and developments initiated by the company since its last increase in 2007, as well as some future initiatives to be undertaken by the Authority.

As he explained the reason for the increases to the media, and those listening live on radio, he acknowledged we are living in serious times.

From water supply improvement projects, investments, replacement and refurbishing of equipment, construction of a technical operations centre to upgrades to sites and the completion of a septic lagoon project, all costing almost $11 million, Saunders pointed out that most of the projects have been funded solely from the resources of the CWSA, and that the company would not be able to endure impending deficits.

“The CWSA has been using a lot of its cash reserves to implement these projects and to continue the high level of service that we are now experiencing, but in so doing, we recognize that we have a very significant burden; a burden that has borne a lot of benefits. Together the debt burden on the CWSA is $3.6 million annually; The CWSA itself only receives annually $23.5 million.”

“We have gone through a process at our management team level. We view our accounts on a monthly basis, and we keep track of expenses, of receivables, of income, and we decided that at this point, we could no longer sustain the shortfall that we have been having since 2007.”

Apart from the completed projects, Saunders pointed out that the company was faced with a number of developmental and financial challenges, which require urgent attention and action.

These include the financing of the solid waste operations within the CWSA, along with investment in future critical projects, as well as the need to finance and execute the company’s capital investment programme.

Future projects include further system upgrades, a Kingstown sewerage project, Grenadines solid waste management project, which he noted were in the short to medium term.

“The reality is, this year we did not get the increase we requested, so it’s going to be very difficult for us to be able to implement all of our projects. We are again going to have to prioritize in terms of which projects we do and which projects can yield the most benefits to us.”

“We can improve, but improvements take finances.”

He said that the increase, which was estimated to bring in $4.9 million into the company, would generate sufficient cash flow to meet financial requirements and obligation of the institution. It would also provide incentives and penalties where necessary.

According to Saunders, a study undertaken in 2007 revealed that the CWSA was in ‘urgent need’ of a substantial increase in tariffs in order to stabilize and improve its financial performance, which was only partially done then.

He indicated that after the study was completed, an increase in total revenue to the tune of $8 million was recommended at that time, and that the latest rate hike would bring the recommendations to just above that mark.

He said that the increase at this time was absolutely necessary, if CWSA is to continue delivering quality water and services to its consumers

“This proposal, which was approved by Cabinet, will result in an 18 per cent increase in solid waste income of $1.5 million, and water and sewerage income will increase by 15% or $3.4 million….”

“….If we just stand still we are not doing good enough…. It is important that we continue to improve the performance of CWSA and we continue to implement the projects that are required to improve the level of service.”

“We cannot afford not to provide water; we cannot afford not to collect and dispose of garbage, and we cannot afford not to properly dispose of sewerage.” (JJ)

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