Stop the excuses and start collecting
-Baksh to water utility managers
By Nigel Williams
September 20, 2003
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Minister of Housing and Water, Shaik Baksh says the management of Guyana Water Inc (GWI) needs to concentrate on collecting revenues rather than bickering about who should have financial control.
He made the statement yesterday at a press conference, while reacting to comments by the management which says it is being stymied by the board’s delays in approving funds, and by a $1B debt.
In an interview with Stabroek News on Thursday, Operations Director of the company, Andrew Barber remarked that if the water utility is to become financially viable, both the government and the board of directors must address the issue of indebtedness, provide working capital so that it can make some investments, and hand more control over to the management. Barber also noted that at the moment Severn Trent felt more like consultants than managers. He added that whenever the company wrote a cheque it had to be signed by a member of the board of directors.
In response Baksh told reporters that the manager’s statement came as a surprise, especially since he had been in touch with the management over the past month and no one had mentioned these problems.
As for the $1B debt, Baksh said, “Severn Trent managers, as part of the evaluation programme, did a due diligence and they knew the state of the water utility. They knew the state of its indebtedness and the balance sheet and accepted the challenge to come and provide necessary managerial expertise.”
He added that in 2002 the government had transferred to GWI $415M in addition to $649M to be paid to GPL for arrears.
This year he said a further $686.5M had been paid to assist in the clearing of arrears owed to Guyana Power and Light.
Baksh said GWI had inherited a debt of $421M at the end of the year 2002.
“But it is incumbent on management to collect its revenues. We must bill customers and collect the revenues.”
He said at the very inception of the managers taking over the company he had told them, both local and overseas officials, that their focus should be on billing and the collections system.
Baksh noted that a specialist had been sent to the country in February to help in this regard and he had stated that there was no problem with the billing system.
With regard to Barber’s claims that the company was operating without any working capital, Baksh said that it was only in June the manager had actually requested working capital to carry out their tasks.
“From January to June we never heard of any need for working capital. But there are funds available through the World Bank; there are funds which remain from unspent funds, from the Bartica and Eccles project some US$1M. But management was very dilatory in putting up a proposal to the Bank for the utilisation of the funds. This was only done over the last two weeks. It took months before this could be done, where is the excuse?”
He noted that the Linden emergency project was yet to start even though it had been approved by the European Union in April. “To date they have $1M Euros to spend on the project. So what is the excuse for not moving the project in the way it was supposed to be moved?”
According to the minister, the GWI board approved a special emergency procurement rule which would allow management to proceed and acquire necessary materials for the project.
“But here we are at September and many things have not been done, it is crawling along.”
He said it was only yesterday he had received a letter from GWI requesting duty-free concessions.
Addressing the issue of full financial control, he said GWI was a public company and it was important that there was public accountability, hence the board had been ensuring that one of the directors sign any cheque before it was issued. Baksh further stated that his understanding was that everything was being done in a very expeditious manner, dismissing claims by Barber that there were delays.
In clarifying the requirements of the British-funded five-year contract, Baksh quoted a part of it which states, “The employer undertakes to appoint the resident project manager as managing director of the employer, investing with authority for the day to day management of the services pursuant to the by-laws of the employer, subject to the bylaws of the company.”
Baksh said the board had been giving the management the degree of autonomy which it deserves to run the company. But he stated that the bylaws clearly stated that “the board may entrust to and confer upon the managing director any of the powers exercisable by them upon such terms and conditions and with such restrictions as they may think fit, including restriction and expenditure of funds and may from time to time withdraw or alter any such powers.”
He said the managers had entered into a contractual arrangement with a private firm for the provision of services for the data cleansing exercise in the sum of $25M and the board had refused to endorse it, because it had not been consulted for its approval. However, the company went ahead and established the unit and the contract was later signed by Baksh himself.
He said the management’s decision was arbitrary and that they should have gone to the board for its approval, since the project was also subject to the scrutiny of the Central Tender Board. “Well if this is what they want as full control, well I regret that; the government will not allow such. They have to comply with procurement rules.”
Moreover, Baksh said he would have to investigate the private firm, because it was one of the firms that had submitted bids for the work Severn Trent was now doing.