Bil­lion$ for wa­ter

Mas­sive in­vest­ment needed for re­gional trans­for­ma­tion

Jamaica Gleaner - - FRONT PAGE - Jo­van John­son Staff Re­porter

CARIBBEAN NA­TIONS need ap­prox­i­mately US$5.5 bil­lion over the next 10 years to ad­dress wa­ter and san­i­ta­tion is­sues, a fig­ure that adds sup­port to the grow­ing calls in the re­gion for more pub­lic-pri­vate part­ner­ships (PPP) or even full pri­vati­sa­tion of the wa­ter util­ity.

The In­ter-Amer­i­can De­vel­op­ment Bank (IDB), one of the lead­ing global sup­port agen­cies in the re­gion, has now joined that call, not­ing that debt-bur­dened Caribbean economies, by them­selves, can­not af­ford to fund that kind of in­vest­ment for what’s con­sid­ered a ‘hu­man right’.

“Com­ing out of the high-level fo­rum of the Caribbean Wa­ter and Wastewater As­so­ci­a­tion that took place [last week], it is es­ti­mated that US$5.5 bil­lion is re­quired over the next 10 years to at­tend to our wa­ter and wastewater is­sues in the Caribbean,” Evan Cayetano, a se­nior spe­cial­ist for wa­ter and san­i­ta­tion at the IDB, told par­tic­i­pants at the Or­gan­i­sa­tion of Util­ity Reg­u­la­tors Con­fer­ence that ended last Fri­day in St James.

Cayetano said the iden­ti­fi­ca­tion of the funds needed for in­vest­ments show that util­i­ties are now able to cal­cu­late the prob­lem and put for­ward so­lu­tions to po­lit­i­cal rep­re­sen­ta­tives.

“It is in this con­text, given that much of these in­vest­ments are way be­yond the ca­pac­ity of

the util­i­ties, that the gov­ern­ments of our coun­tries, we be­lieve, are demon­strat­ing that there must be a dif­fer­ent way to at­tend to these prob­lems.

“Let’s look at it per­haps in part­ner­ship with the pri­vate sec­tor and the role that the pri­vate sec­tor could play in bring­ing in­vest­ments to ad­dress the prob­lems.”

The prob­lems af­flict­ing the pro­vi­sion of re­li­able and af­ford­able wa­ter in the Caribbean have been linked to old sup­ply sys­tems, some in place for more than 100 years. There are also high lev­els of leak­age and theft, poor main­te­nance and in­ad­e­quate charges for us­age, which af­fect rein­vest­ment into the sys­tem.

Be­tween 2008 and Oc­to­ber 2016, the IDB pumped more than US$2.2 bil­lion, or just un­der 30 per cent of its fi­nanc­ing in the re­gion, on wa­ter and wastewater projects, ac­cord­ing to Cayetano.

More, he said, needs to be done and the rec­om­men­da­tion to Caribbean gov­ern­ments is to adopt more busi­ness prin­ci­ples in util­ity reg­u­la­tion and em­brace PPPs as a prac­ti­cal av­enue through which to get the re­quired lev­els of in­vest­ments with­out dis­turb­ing the fo­cus on so­cial sec­tors.

It’s a point sup­ported by Dr Ho­race Chang, Ja­maica’s min­is­ter with­out port­fo­lio with re­spon­si­bil­ity for wa­ter, who noted that the Gov­ern­ment is in­tent on list­ing the Na­tional Wa­ter Com­mis­sion on the Ja­maica Stock Ex­change.

He was care­ful to note that the State would still have con­trol over dis­tri­bu­tion.

“We are look­ing at pri­vatis­ing wa­ter by hav­ing pri­vate sec­tor par­tic­i­pate in wa­ter pro­duc­tion by PPP op­er­a­tion. We will ask in­vestors to pro­duce wa­ter for us, then we will dis­trib­ute it. We are very com­mit­ted that the dis­tri­bu­tion should re­main in one com­pany, be­cause it’s dif­fi­cult to de­velop. We’re also look­ing into pri­vati­sa­tion of wastewater treat­ment,” Chang said, not­ing that the reg­u­la­tion for the new struc­ture would have to be worked out.

UNATTRAC­TIVE TO POLITI­CIANS

Chang ad­mit­ted that in­vest­ment in wa­ter has suf­fered through­out the re­gion be­cause of its “unattrac­tive­ness” to politi­cians.

“Of­ten, it is not a ma­jor po­lit­i­cal prob­lem un­til you don’t have any wa­ter. The mo­ment wa­ter starts again, the idea of in­vest­ing bil­lions of dol­lars in wa­ter goes, be­cause it’s much more at­trac­tive to fix a road. [Fix­ing in­fra­struc­ture] gives the mem­ber of par­lia­ment a nice, good re­sponse that he’s work­ing. For that rea­son, the ap­proach to wa­ter, in terms of in­vest­ment, has been lag­ging be­hind,” he said.

Some re­gional util­ity stake­hold­ers, in­clud­ing Kath­leen Riviere-Smith, a for­mer head of the util­ity reg­u­la­tion au­thor­ity in The Ba­hamas, said gov­ern­ments should con­trol wa­ter with pri­vate sec­tor fund­ing mod­erni­sa­tion. Wa­ter can re­main with the gov­ern­ment or a mu­nic­i­pal­ity. How­ever, they need to re­move the pol­i­tics out of it, and it needs the cap­i­tal in­vest­ment,” she told The Gleaner.

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