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RIC review of WASA rates stalled

Monday, October 1, 2018
Photo by:Alex Kelly

Missing documents are stalling the Regulated Industries Commission’s (RIC) review of water rates. The Water and Sewage Authority (WASA) has not provided the RIC with information on its cost structure and, as a result, the commission has not been able to start the review. WASA’s rates were last reviewed in 1993.

In February, RIC chairman Dr Hyacinth Guy told a joint select committee of Parliament that consultations would be done on August and September after a draft proposal had been completed. Contacted for an update, Guy said the RIC is going through the process but was facing some challenges.

“That is all I am able to say at this time,” she said.

However, a well-placed source at the RIC confirmed that WASA had not provided information that would form the basis of a rate review.

“The issue is that WASA has not been able to put together a business plan. A business plan is: you give WASA a template and you say put your cost in this template, give me your cost in this model. They said they couldn’t do it and they hired a consultant to do that,” the source said.

“What is needed is WASA’s cost structure—its capital expenditure, its operating expenditure—all the projects and then take the whole cost structure into consideration and say, okay, in order to maintain this at a reasonable level, using international best practices, you need so much money to cover your costs and that money will translate into a rate.”

Information given to the RIC by the consultant was not adequate, so the process has ground to a halt as more indepth information is needed, the source said.

“The RIC has asked for more precise information, more granular information but WASA said they had to hire another consultant to do it, so there is no telling when the process can begin. How can you have an organisation like WASA with fully qualified and technical people who cannot tell you what their cost structure is?” This according to the source.

RIC is reportedly exploring legal options to get the information it needs for the rate review.

The review can take several months to complete, inclusive of the time needed for consultation and reviews before a final recommendation is sent to Parliament.


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