Facing heat over rate request, NWC unveils 5-pillar plan

BUFFETED by criticisms over its request for a 51 per cent rate hike, the National Water Commission (NWC) has outlined a five-pillar revenue reform programme on which it has embarked. Addressing a meeting of the Jamaica Observer Press Club last Wednesday, NWC officials and the minister with portfolio responsibility for the entity Matthew Samuda outlined the programme which, they said, should improve service delivery and reduce its financial risk to the Government. The programme includes renegotiated water tariffs, debt restructuring, an energy overhaul, reduced water losses, and the commercialisation of its land holdings. Samuda told Observer editors and reporters that the NWC has implemented these strategies to navigate a revenue position that has continued to deteriorate over time. “You can’t run a balance sheet and when you look at the collections, when you look at the payables, when you look at our receivables [there is no balance]. There has to be a balance somewhere. “So, the two things that we are targeting are service delivery and reduction of fiscal risks. And we have five pillars that we’re pursuing to achieve both,” he said. Samuda explained that the first pillar involves the commission’s proposal to the Office of Utilities Regulation (OUR) to approve a 51 per cent increase in water and sewerage rates to help finance operations and critical investments over the next five years. “In many ways, the tariff increase is going to improve cash flow, not necessarily targeting major issues. It’s going to reduce the need for the creativity that the board has had to employ in negotiating when they pay, how they pay the particular bills that they have. So, first pillar: Right sizing price for water, meaning bringing it closer to the cost of production,” said Samuda. Debt reconstruction, named as the second pillar, will seek to settle the utility’s $33.2 billion in debt. It was disclosed by NWC officials last Tuesday during a sitting of the Public Accounts Committee, that $21 billion of that amount is owed to the Government in General Consumption Tax. The remaining $12 billion includes approximately $6 billion owed to Central Wastewater Treatment Company, which treats much of the sewage from Kingston and parts of St Catherine at the Soapberry facility, with another $6 billion owed to contractors and suppliers. Additionally, the report found that the NWC’s net receivables — money owed to the utility — stood at $4.6 billion as at March 2026. Added to the list of accumulated fiscal challenges, Samuda told journalists last Wednesday that the COVID-19 pandemic was a major catalyst for revenue loss, citing hotel closures that caused disruptions in supply chains, which subsequently increased the cost of operating the utility. Those woes were further frustrated by the onslaught of droughts in 2022, 2023, and 2025 along with Hurricane Beryl and Tropical Storm Rafael in 2024, as well as last October’s catastrophic Hurricane Melissa, which led to further infrastructural and revenue degradation. Moreover, Samuda argued that in 2026, Jamaica could be facing its worst drought recorded in the last 200 years, amplified by the El Nino weather phenomenon that is expected to last well into spring 2027. A reduction in commodity to sell, he noted, will lead to a contraction of income. Samuda posited that this second pillar is vital to reduce the worsening probability of NWC becoming a fiscal risk to the Government. The third pillar focuses on overhauling the commission’s energy infrastructure to reduce consumption and improve reliability. That work includes installing more reliable pumps, replacing electrical infrastructure that Samuda described as more than 80 years old, and introducing renewable energy where appropriate. He said the commission is working with the Jamaica Public Service Company (JPS) on its energy plans. Reducing non-revenue water (NRW) — which is water pumped by the commission but does not reach paying customers’ pipes — forms the fourth pillar. Samuda stressed that work already undertaken in Kingston, St Andrew and Portmore, St Catherine, had made a significant contribution to the utility’s cash flow. Describing non-revenue water as “crisis one, two, and three” facing the commission, Samuda pointed out that 70 per cent of the utility’s water production falls under the wasteful category. He underscored the importance of reducing losses as part of the financial turnaround and noted that cutting leaks would accompany other reforms. The fifth pillar involves commercialising the NWC’s land holdings through divestment or long-term leases, where appropriate. The water minister said the commission has one of the largest land banks in the country and would seek to put those assets to commercial use, following approaches taken by the Urban Development Corporation and other government entities. Samuda also disclosed that acquiring private water producers is under consideration, linking the proposal to the NWC’s need for cross-subsidisation. He said the combined measures are intended to strengthen the commission’s balance sheet while improving the reliability of the service it provides. “Those are the big-ticket items that we’re pursuing…to transform, yes, the balance sheet of NWC, but more importantly to transform service delivery,” he said. Alongside those measures, the NWC is pursuing greater operational efficiency and staff productivity. For this aspect, NWC Chairman Michael Shaw pointed to performance appraisals as indications that management is holding the organisation accountable. He said unions had been advised during the restructuring of salary packages that the next phase would have to centre on performance and productivity. “That is something that comes directly from the board where the president and his team have come under severe pressure to make sure that every staff member has to produce at a certain level. When we took over…we were getting the performance appraisals from 51 to 54 per cent; it is now up to 95 per cent. You talk about accountability, so we start with in-house efficiency to make sure that we’re getting the best results from our team,” said Shaw. Samuda argued that the public should assess the tariff increase alongside the commission’s commitments to reduce losses, lower energy consumption and improve its operations. “So, we’re not asking the public to simply say, 51 per cent increase, but what else? The reality is we’re going to cut the leaks in the NRW; we’re going to cut the energy usage. We are going to restructure our debt; we are going to commercialise the assets that NWC has; we are going to pursue productivity,” declared Samuda.