-annual report
The Guyana Water Incor-porated (GWI) was able to collect $2.25b from customers in 2007 – 44% more than in the previous year – but the utility still racked up a loss of $10M which was however a far cry from the $847M loss in 2006.
Its 2007 report tabled in the National Assembly last week, said that with the completion of the Hi-Affinity Billing System in July, 2006, the water utility had been able to issue $3.03 B in bills for 2007, up $1.22B from 2006. Of the 2007 bills issued, un-metered customers accounted for 54% of the bills. The total collection for 2007 was $2.25B – which was 44% higher than the previous year and as a result, GWI achieved 92% of its collections target while the billings figure was 96%. Prior year billings constituted 21% of the bills issued in 2007.
At the end of 2007, disconnection jobs were contracted out and as a result GWI said there was a marginal improvement in collections. Payments from government entities accounted for 39% of the collections. The report cited as one of the utility’s major frustrations, the frequent power service disruptions, attributable to the “poor quality of grid power provided by our sister utility, the GPL”. It said the destruction of motors for both potable water and sewerage applications caused by voltage problems was in the order of over $12M which GPL had refused to cover.
The average number of jobs done in 2007 was 26,957 of which 75% were for the repair of leakages. Expenditure for the year was $4.6B of which premises inclusive of electricity accounted for $1.8B and employment cost $632M. The bulk of the current assets figure – $3.2B – was made up of debtors $2.3B while current liabilities were $703M.
Referring to the termination of the Severn Trent management contract in February 2007, the GWI report said that the UK company’s performance was rated as poor to the extent that donor agencies had withdrawn their funding. The report said that policies and procedures were not adhered to and accountability was not seen as crucial.
The utility’s Chief Executive Karan Singh who had been restored to his position at GWI after the termination of the Severn Trent contract was himself removed at the end of March this year.
Without qualifying his opinion, Auditor General Deodat Sharma said that the sum of $2.3B shown in the balance sheet as accounts receivable showed several differences when related records were examined. He did however note that the company is engaged in an exercise to examine its accounts. In its accounts for 2006, GWI made provision for bad and doubtful debts of $2.4 B. In 2007 this figure rose to $2.7B. The Auditor General also pointed out that the amount of $3.46B shown in the balance sheet as paid-in capital raised questions as $3.3b was transferred from the Guyana Water Authority at the time of incorporation but there was no schedule to support the difference of $91M.
An amount of $376M was shown in the balance sheet as cash and cash equivalents but the company did not maintain a cash book during the period and so “full reliance could not be placed on the amounts shown as the cash book balance in the certified bank reconciliation statements which were prepared and submitted for audit examination”.
In the notes to the accounts under contingent liabilities, GWI acknowledged that it has not been filing tax returns as required by the tax acts. It said that it has been assessed for property tax in excess of $300M and discussions were underway with the government for an exemption from all taxes.
