Severn Trent Water Incorpor-ated (STWI) only met two of the seven targets outlined in the UK-funded contrac it was given to manage the local water company, housing and water minister Harry Narine Nawbatt has disclosed.
And according to him this was the only reason that caused the termination of the contract, a mere 10 months before its official December 2007 completion date.
The minister at a press briefing yesterday said that the board’s decision to terminate the contract was also influenced by the results of an audit conducted by the UK Department for International Development (DFID) through an independent firm, Halcrow Group Limited, which was a condition of the grant-financed contract.
Severn Trent was expected to reduce the levels of non-revenue water to 25% by the end of 2005 but according to the audit report this target was not achieved and ranged from 61% in 2003 to 66.5% at the end of 2005.
The statement said that it was no secret that the company continued to flounder with regard to its poor revenue collection, which STWI also failed to increase by 90% as stipulated by the management contract. According to the ministry, this was another key target which was not realized leading to frustrations in the company’s financial operations.
The water management contract also stipulated that 85% of GWI’s customers should be metered by the end of 2005, but this, too, was not reached since the Halcrow audit revealed that only 24.7% of the company’s customers were metered.
Customer services such as routine billing and the repair of leaks, according to the ministry, continued to produce dismal figures as indicated by the Halcrow audit.
Other targets not achieved include the provision of water to Amerindian communities in the hinterland. While the contract indicated that 80% of the Amerindian settlements should receive potable water by 2005, only 4.3% of those settlements received water in 2006 according to the Halcrow audit.
Nawbatt made reference to a letter carried in this newspaper in which its writer alleged that the targets set out in the management contract were unreachable. In this regard, the minister said that now was too late for the company to claim that these targets could not be met, after four years.
“The contractor would have had to see the contract before and see the targets to assess their reliability, so now is too late to make those claims,” he contended.
Turnaround plan
With these targets not met and with nearly three quarters of the 3.2M pounds sterling already expended the minister said DFID recruited a group consultancy “Castalia’ and they have worked with the company’s board and have prepared a ‘turnaround’ plan.
The details of the plan were not shared with the media but Nawbatt said its preparation was done based on a decision by the donor community which believes that it was important for the company to have such a plan to ensure that its fortunes could be improved.
“The consultants met with government and GWI senior management and it was agreed that some of the targets would be revised and should also be set with realizable limits,” the minister said.
“We don’t want to create the impression that we set things that we can’t achieve, he insisted.
He said a team headed by Executive Director Sizwe Jackson had already prepared the plan and he received it yesterday. The document is to be perused and decisions are to be made with respect to targets by GWI’s board, the minister explained.
Meanwhile the minister announced too a board decision for Jackson to act as the interim managing director but the ministry will publish vacancy notices locally and in the region for persons willing to indicate their interest to fill the position.
At this point he interjected too that government was willing to retain the services of Managing Director Michael Clarke in a private capacity. However he said that Severn Trent was insistent that if Clarke stayed it wanted three others employed by it, to remain in their positions under the auspices of STWI but not contracted with GWI.
The minister said a decision was made against this since the intention was to completely sever ties with Severn Trent.
Meanwhile the remaining funds from the DFID grant, approximately half a million pounds sterling according to the minister would be used in the same areas it was intended for like technical advice, payment of salaries and for the hinterland project and to purchase pipes and other needed materials.
And the minister said it is still impossible for GWI to operate without a government subvention, “at least not before the end of this year. He said subventions given to the company to date are in excess of $1b.
Chairman of the board, William Wilson who was also present at yesterday’s press briefing responded to allegations that STWI was never able to effectively run the company on its own and suffered much intervention from the board.
Wilson said the board from the inception, had set up protocols and by-laws and the management of GWI utilized these.
He said the board was forced to play a more active role in the financial aspects of the company and was even made to introduce finance controls. He said in the area of human resources, decisions were left up to the management and they had sole responsibility whether to ‘hire or fire.’ Wilson said too that committees sat and assisted the management with looking into certain areas of concern.
He acknowledged however that many times the board was confronted by management on a number of issues in which they wanted advice.
Nawbatt had advised the National Assembly on Monday about the GWI decision to prematurely end the water contract and this was also after an article was published in this newspaper explaining same.
Severn Trent in a statement on Monday too acknowledged that its contract ended earlier than expected and had said it and GWI had reached an amicable agreement which would also see it assisting GWI’s efforts to improve water services during a transition period up until the end of April this year.
STWI, in the statement, said that “it was proud of the solid achievements and improvements that have been realized by GWI during the past four years including better drinking water quality, better levels of customer service, reductions in non-billed water losses and GWI’s performance in providing emergency drinking water supplies during the disastrous 2005 floods.”
The firm said that both it and the water company would have liked to achieve more but events such as the floods and delays in securing funds for capital investment have thwarted that.
However STWI said that it believes that GWI is now in a position to continue the drive to improve water services under the leadership of a Guyanese management team.
Sources had told Stabroek News that the decision to terminate the contract was taken following a series of meetings where the $3.2m pounds sterling contract was scrutinized.