Water utility management chafes under board control
-says projects delayed due to indecision By Nigel Williams
Stabroek News
September 19, 2003

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The management of Guyana Water Inc (GWI) says it needs more financial control of the utility, instead of having to wait on a board dominated by government directors to give the go ahead on key projects.

The company has been operating with a current debt close to $1B and with no working capital. This situation, according to Operations Director Andrew Barber, makes the company very reactive, noting that it has not been able to undertake a single project on its own. Barber told this newspaper in an interview yesterday that the situation had been compounded by three major issues, which the government and the board seemed reluctant to resolve.

“The only way we are going to move forward is for the Board and the government to deal properly with the indebtedness of the company, provide some working capital so that it can make some investments in making the company better and give more control to the management of the company... Are we here on management contract or are we here as consultants? At the moment we feel that we are really acting in a consultancy capacity.”

Barber told Stabroek News that if the government and the board could address those three areas the outlook for the company would improve.

“But despite this not happening, I still come to work every day and I am pleased to be here and I want to make a difference, but my colleagues and I just feel frustrated, because without these three major issues being resolved with the government and the board it is difficult to see how we going to make the sort of progress we clearly need to make and bring about the changes we need to bring about,” the Operations Director lamented.

Barber pointed that the government kept saying that GWI was now being managed by Severn Trent and that the firm had responsibility for running it.

“But that is not the case; full financial control of the company is still held by the board of directors.”

He noted that any cheque GWI wrote had to be signed by a member of the board. Moreover, Barber told this newspaper that part of the five-year British-funded contract was for them to have control of the company, but to date that had not happened. He also cited a case which he termed as the board dragging its feet on approving a major project the management planned to undertake. He told Stabroek News that, in an effort to improve its revenue collection, the management had proposed the setting up of a data-cleansing unit, which would be tasked with the responsibility to gather information with regards to customers payments among other things. Barber said despite the urgency of the matter, the board delayed the process so much that the management was forced to move ahead with the project without the board’s approval. However, Baksh later approved the project and $25M was voted to establish the unit. But Barber said there were many other delays due to the board’s indecision.

When contacted on the matter, Chairman of the GWI Board, William Wilson said the board had always been supportive of the management. He said there were a lot of problems with respect to the initiating of the unit and as such the board was more cautious rather than delaying the process as claimed by Barber.

He said GWI was cash-strapped and as such stricter financial control was required.

He said the board was not doing anything inconsistent with its policies, regulations and the Company’s Act, neither was it acting inconsistently with the terms of the GWI licence, nor the management contract.

Barber said most of the works the company had been undertaking were those that required little or no finances. He said even some of the basic health and safety equipment they could not afford to provide to their staff due to financial constraints.

“We are basically a very, very reactive organisation and had it not been for those inherited difficulties we would have been much more proactive.”

He said GWI could become a financially viable company, but the government must first acknowledge its indebtedness and intervene in this regard. He added that Severn Trent had inherited a company whose billing was atrocious and the system riddled with loopholes.

Barber is now calling for a frank and open discussion with the government over the close to $1B debt it inherited when it took over in January.

Stabroek News was told the $1B debt comprised of some $500M for outstanding payments to GPL and a further $500M to suppliers. However the government has provided $650M in subsidies this year to clear the $500M owed to GPL, but up to now it was still in arrears to the suppliers, and during the process has incurred other expenses including another huge debt to GPL totalling $300M.

Barber said GPL and GWI had worked out a payment plan and that the campaign to reduce water was making a significant impact on the monthly energy bill which had been touching $100M, a month ago.

The current board was formed June 1, 2002 when the former Guyana Water Authority and the Georgetown Sewerage and Water Commissioners were merged.

The members who were re-appointed last June to serve another term are: Wilson, John Seeram, Mayor of Georgetown Hamilton Green, Tiericharand Balgobin, Permanent Secretary in the Ministry of Housing and Water, Claudette Moore, Member of Parliament, Komal Chand and John Da Silva. Managing Director of GWI, Dereck Hodson is the lone voting member on the board for Severn Trent.

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