PM defends water rate increase

In the face of criticism by the Opposition, Prime Minister Dr Ralph Gonsalves has stoutly defended the October 1st water rate increases, saying that they do not negatively affect the poor.{{more}}

“The increase is structured in a manner to make sure that the poorer class of people do not have to pay either any increase or any significant increase,” Dr Gonsalves said at a press conference last Monday, October 1, on his return from the United Nation’s General Assembly.

He reiterated that persons using up to 2,500 gallons of water, which represents 37 percent of the Central Water and Sewerage Authority’s (CWSA) customers, will not pay more for water.

The next bracket of persons, using between 2,501 and 5,000 gallons, 29 percent of the water consumers, will pay $1 more, the rate moving from $5.50 to $6.50 per thousand gallons.

As he outlined the other increases in the upper brackets of water consumers, Dr Gonsalves stressed that any further subsidy will, therefore, benefit the upper class, not the poor; they (the poor), he believes, fall within that bottom 66 percent of consumers.

He further sought to clarify the situation regarding the solid waste operations. Dr Gonsalves said that the solid waste operation of CWSA is heavily subsidized; up to $4 million a year.

He said that 38 per cent of the Solid Waste department’s income is subsidized to the tune of $1.5 million by Government. A further $1.1 million represents CWSA’s subsidy for solid waste operation on the mainland, while an additional $1.4 million subsidizes operations in the Grenadines.

Dr Gonsalves was also very critical of opposition leader Arnhim Eustace for highlighting that CWSA, under the New Democratic Party (NDP), made more profit than now, under the current administration.

During his recent address to the nation, Eustace said that between 1998 and 2001, when his New Democratic Party (NDP) was in power, the CWSA made significant profits, passing a million dollars each year.

The Opposition Leader said that since then, the company has not been able to pass half a million dollars in profit, and the increase has been placed on consumers for it (CWSA) to so do.

Dr Gonsalves suggested that to allude to this was misguided, seeing that CWSA’s solid waste operations were very limited in those days, catering for only Kingstown and its environs.

The prime minister said that it cost $24 per household to operate the garbage collection service, and even with the new price structure, the operation will still be heavily subsidized.

Households on mainland St Vincent will pay an increase of $3, from $5 to $8, while households in the Grenadines will now pay $5 for the service. Previously, the service in the Grenadines was free.

He said that based on information submitted to him by CWSA’s General Manager, Garth Saunders, the financial burden of subsidizing of the solid waste operations, in addition to foreign exchange loses, robbed the CWSA of what could have been a $1.9 million average profit between 2002- 2007.

Regarding the foreign exchange losses, Dr Gonsalves explained that certain debts incurred by CWSA are billed in the Euro currency.

So as the EC currency is tied to the US currency, whenever the Euro appreciates against the US, as it has been doing consistently over the last couple of years, the company has had to spend more money to service the debts.