Severn Trent contract termination leaves GWI in the lurch, metering and billing remain huge problems
Stabroek News
February 23, 2007
The termination by the Government of Guyana of the British Company Severn Trent's management contract is unlikely to bring an end to the protracted woes of the ailing Guyana Water Inc. (GWI). In fact, the local water company must now decide whether or not it will install yet another high-priced foreign contractor or place its faith in its home-grown managers.
Government last week announced that it was prematurely terminating Severn Trent's five-year contract - signed in 2003 - for non-performance and Stabroek Business understands that the Company's Severn Trent appointed Manager Michael Clark has already vacated the position and that the water entity is currently run by its local Operations Manager, Sizwe Jackson.
GWI's woes long predate the arrival here of Severn Trent. The company has, for several years, been plagued by major difficulties associated with service provision. The GWI is the least-regarded of the country's three major utility companies and its failure to provide a reliable service has led customers across the country to feel that the payment of water rates is neither a legal nor a moral obligation. Sporadic attempts to collect outstanding water rates totalling billions of dollars through threats of disconnection have, it appears, met with only limited success. Disconnected consumers have, in many cases, effected their own reconnection without settling their debts to the company and but for the large subsidy provided by government the company would be unable to meet its own operating costs including a huge and reportedly mounting electricity bill.
Sources close to the water sector have told Stabroek Business that government and Severn Trent have long disagreed over the level of water rates with the latter insisting that the viability of GWI depends on a considerable increase in what consumers currently pay for water. Even the rate increase granted by the PUC last year and made retroactive to 2005 - which will appear on consumers' bills at the end of February - is considered nowhere near enough to meet the company's operating costs.
The prevailing view in the sector, however, is that rate levels may not necessarily be GWI's problem. It is felt that consumers are being charged for significantly less water than they are actually consuming and that the problem inheres in the fact that most consumers are unmetered and that, therefore, GWI has little clue as to average water consumption.
Metering and billing have been two of the company's more pressing headaches but those have not been Severn Trent's only problems. The day-to-day running of GWI is a preoccupation that requires the smooth running of a countrywide network of human and other resources. Add to that the fact that the breakdown of any one of its pumps that supplies communities with water can plunge the company into repair and replacement expenses that it cannot afford to meet.
Water sector sources contend that while the Severn Trent contract has failed to improve the fortunes of the company, the expatriate company's lack of success is hardly surprising given the situation that it inherited. Additionally, the point has been made that since the five-year Severn Trent contract provided for a continual reduction in the number of Severn Trent senior managers - by 2005 there were, reportedly, no more than two Severn Trent managers in the GWI system - the question arises as to how much of the blame can be laid at Severn Trent's door since the company was being run by local managers for some time, anyway.