05.OCT.07

Editor: I have read the Editorial in The News of last week Friday (September 28, 2007) under the caption “Unfair” in which it called for a subsidy to the CWSA by the Government to offset the recent increases in water, sewerage and solid waste rates.

The Editorial is misguided, both on the facts and in its opinion.{{more}}

First, the facts. The Government of St. Vincent and the Grenadines already subsidises the Central Water and Sewerage Authority (CWSA) significantly. Each year, the Govenrment subsidises “the Solid Waste division” of CWSA by $1.5 million dollars. This represents 38 per cent of CWSA’s revenues from “Solid Waste”. Still, CWSA further subsidises “Solid Waste” by another $1.4 million. Until the recent increases, each household on mainland St. Vincent paid $5.00 per month for the collection and disposal of garbage. It costs $24.00 monthly to provide this service to each household. Even with the modest increase in the fee for “Solid Waste”, the service will still be heavily subsidised by Government and CSWA. And until the recent imposition of a “Solid Waste” fee in the Grenadines, the service was performed free of charge.

Secondly, as a condition of the grant of a multi-million dollar soft-loan from the Caribbean Development Bank (CDB) for the Grenadines Solid Waste Project, an upward adjustment of the “Solid Waste” fee was demanded. Indeed, the increase is way below what was suggested by CDB officials.

Thirdly, the minimal increase in the monthly water rate barely affects 66 per cent of the consumers. There is no increase for consumers using up to 2,500 gallons monthly. And there is only a $1.00 increase per thousand gallons for consumers of between 2,501 gallons and 5,000 gallons monthly. St. Vincent and the Grenadines has the most reliable, the best quality, and the lowest water rates throughout CARICOM member-states.

Fourthly, as a condition of the $19 million soft-loan from the French Agency for Development, a rate review for water was prescribed.

Fifthly, the elderly poor, 65 years and over, who are on public assistance continue, will continue to be exempted from paying basic charge, the so-called “water meter charge” of $12.00.

Unfortunately, the Editor of The News short-changed the readers by suggesting a further subsidy from VAT collections. There is this mistaken view that the Government is awash with monies as a consequence of VAT. The increase in revenues is actually quite modest. In any event, there are far more deserving causes for government subsidies or use of government’s revenues than to subsidise the better-off consumers of water. It is for this reason that this ULP government always focuses its targeted strategic interventions to assist the poor and working people and to engender economic growth/development.

The Editorial then went off the rail and brought in the matter of the recent increase in flour prices. The fact is that if the modest price increase for flour was not granted, the Flour Mill would have been forced to close. The Mill has been demanding an increase for some two years now and it was granted only recently. In fact, the current price of flour still does not fully cover production costs. In every CARICOM country the price of flour has gone up at least three times in the past two years. There is a thing called the rise of commodity prices internationally, especially in this case fuel and wheat! We have no control on these.

In all the circumstances, any reasonable person seized of all the facts must reasonably conclude that the recent increases in the fees for water and the collection and disposal of garbage are most fair and justifiable. Please let us all keep the discussion rational and reasonable!

Sincerely yours,
Hans King
Press Secretary to the Prime Minister