BWA’s financial model not sustainable

The Barbados Water Authority’s (BWA) financial model is not sustainable. It simply does not work.

This admission came yesterday from BWA General Manager Keithroy Halliday, who revealed that the Water Authority’s existing loans being serviced, as well as those which are about to be drawn down, bring the BWA’s total commitments to about half a billion dollars.

“On the topic of finance, the BWA has significant challenges” Halliday acknowledged during a press conference convened at BWA Headquarters in the Pine St. Michael.

“The BWA is not simply a plumbing organisation. There is a certain level of sophistication that is increasingly required to make sure that we can do the job and to do the job responsibly and capably. There is a certain level of engineering and skill sets that must be on hand and that has been at the heart of the development of the BWA [lately],” Halliday added.

“So finances have had to be distributed to be able to deal with that. Whereas, I think it was in 1999 we had a rate increase of about 60 per cent to try to match some of the need, the increase in it would not have addressed, in retrospect, the financing or investment needs that we’ve had to engage over the last two years and will have to continue to actively engage, if it is that we are to continue to make the BWA relevant in terms of its delivery, both on the potable water side, as well as what we need to do to shape up deliverables on the waste water division side,” he continued.

“So it means then that our financial model as is, is not sustainable. It has not been sustainable for some time. The financial model as is, does not work and at some point in time [very soon], we have to look at it and take some hard decisions as to how we can move toward a model, that is a more relevant to our needs” the general manager asserted.

With respect to funding, he pointed out that to date, the BWA is subject to a lot of multilateral agency considerations and loans in particular, as there are a number of projects underway in the BWA’s Project Management Department. However, recognising the need to adequately service these loans and get on with its projects as well, the BWA has been seeking grant funding, and has had some success in this area to date.

“We are about half a billion in commitments. The existing loans that are about to be drawn down, as well as the existing loans that we are servicing, would be about half a billion,” he stressed.

“We are actively trying to, wherever possible, source grant funding. So for instance, we are [engaging] with a private sector [partner] to help us with specific activity on the South Coast,” he revealed.

“In terms of servicing some of the obligations, there is one in particular that the government services on our behalf. In terms of the others, we are still trying to fight it with our own cash flow. Because our cash flow has not been sufficient – and of course we need assistance with that – we are trying to restructure to deal with that it and it has been climbing as result, because the money has to come from somewhere,” Halliday stated. (RSM)