$655M in additional disposable income for water consumers

Minister of Housing and Water, Hon. Collin Croal, said that the PPP/C Government’s initiatives in the water sector will provide an estimated $655 million increase in disposable income to citizens.

Minister Croal was at the time making his contributions to the National Budget Debate on Friday, where he highlighted some of the progress in the water sector over the past five months and plans for 2021.

The Government has announced a five per cent reduction in water tariffs across the board. This initiative, when implemented is estimated to provide an additional $248 million benefit for some 173,000 customers.

“Not only have we removed the VAT on water imposed by the previous government, we have also reinstated the water subsidy that was removed. As a result, the removal of VAT on water consumption that exceeded $1500/14 cubic meter, over 30,000 customers will see their disposal income increased by some GY$107 million. With the subsidy reinstatement more than 26,300 pensioners will be directly impacted by some $300 million increase in their disposable income,” Minister Croal told the National Assembly.

Minister Croal said the distribution of clean and clear water to citizens is a priority of the PPP/C Government.

The Guyana Water Incorporated (GWI) has assessed the water distribution systems across the country, and found a several of challenges including, high iron content and low treated-water coverage; high levels of non-revenue water and limited access to water by hinterland residents.

Minister Croal said when the Government took office, GWI was on the verge of a financial collapse. Despite the tariff increases by the previous government, it was operating at a loss of $1.1 billion. In fact, the water company had overdrafts at commercial banks to the tune of $270 million.

“Employment costs had skyrocketed since 2015, rental of buildings, and debt plagued the entity. At August 2020 GWI debt to suppliers totaled $783 million. And even worse, over 5,000 customers were denied service connections because basic inventory levels of service connection materials that are required to provide a service had deteriorated,” Minister Croal revealed.

However, in the latter part of 2020, GWI collected $5.3 billion in revenue, an increase of $1 billion when compared to the same period in 2019.

“Its debt is reduced, it did not access its overdraft facility, and overall, its financial situation has improved. And this has happened in less than seven months and without burdening our pensioners,” the minister said.

The GWI is now operating with a new five-year strategic plan that aligns with the national priorities of providing clean, reliable and affordable water. The company is focused on increasing access to treated water coverage to 90 per cent, reducing non-revenue water and modernising the infrastructure.

Already, works have begun on upgrading the transmission mains at Vlissengen Road – Shelterbelt to Lamaha Street. Once completed, 40,000 residents will enjoy an improved quality of service.

Additionally, 26,000 water meters will soon be installed in Eccles, Friendship, Providence, Mon Repos, Beterverwagting and Diamond.