NWC looks to flush bad debt
Utility company seeks to plug revenue leakage, still looking to pass arrears to collection agency
THE NATIONAL Water Commission ( NWC) is seeking to engage a legal officer with the sole duty of addressing revenue matters.
Although it supplies 190 million gallons of potable water each day to its more than 400,000 registered customers, the company said that its cumulative receivables are just under $40 billion.
NWC President Mark Barnett said the utility company is determined to utilise all possible avenues to collect as much of its revenue as possible.
“We often don’t go to the extent of putting a caveat on properties with a view to disposing of same, but we are now going to pursue that as part of the strategy to really change the mindset of those who can pay but who just refuse to pay. Those who can’t pay and have challenges, we will work with them. We offer a 24-month payment arrangement for some customers, especially pensioners. We would consider those as special cases,” Barnett explained during a Gleaner Editors’ Forum on Wednesday.
The NWC president also disclosed that a few of its customers are before the courts as it seeks to recover outstanding sums.
“We try to do the legal letters first, and we have been getting a lot of responses. I have been issuing letters from my desk as a result of demonstrating to people that we are serious about collecting our funds. The letters that we have issued so far have reaped us over $60 million without necessarily having to go to court,” he said, adding that this process began in May.
In early September, the NWC announced its intention to package between $15 billion and $20 billion of its debt stock for sale to a collection agency.
“It may be sold at a discount. We don’t know what that is yet. We will allow the tender process to drive that, but it is our determination to go after all our revenue. Our overall receivables, without provision for bad debt, is about $39 billion to $40 billion,” Barnett explained.
He continued: “Those outstanding amounts are necessary to help us to do the type of improvements that are demanded by the population. NWC is not a net recipient on a normal basis of government subvention, so whatever we earn is what we use to take care of our business – pay our debt, pay our staff, and do the type of infrastructure and investment that is required to improve water supply right across the island.”
Barnett said that the utility company collects roughly 85 per cent of the between $3.3 billion and $3.5 billion billed to customers monthly, and he is pushing to move that figure to 95 per cent.
At the start of the COVID19 pandemic, the NWC halted disconnections and provided discounts to customers in arrears to ease the financial burden.
“However, when we did our analysis after six months, up to September, we recognised that people were taking us for granted. They weren’t paying willingly, even though most people were at home consuming more water. Our collection level was down to 65 per cent of what we bill, ”Barnett told the forum.
A strategic decision was made to put an end to the concession and resume the disconnection efforts.
Barnett said there has been a gradual improvement in payment, and in one month, he observed a marked improvement of more than $300 million above the average collection.
In respect of the Government, local government entities have the highest receivables as they often support communities through standpipe arrangements.
“Some $1.7 billion is outstanding from those activities. It’s part of the social support that is provided through that ministry, ”Barnett said.
He added that at least 75 percent of government entities are paying their bills on time.