Governments are obligated and must protect, by means of, licensing, regulating and testing, its public waters, quality and quantity, for human piped or bottled consumption, animal and plant farming, industrial usage, waste water treatment and flood management, to preserve and enhance living standards.
Licence geographically, natural or man-made water courses, collection dams and wells, and runoffs points, to qualified and competent operators.
Regulate such operations as to their professional practices; engineering, procurement, maintenance and financial, to justify the operation’s pricing.
Testing on a frequent but random basis the water quality assigned for specific distribution categories and measuring various factors, such as; rainfall per area, treatment procedures and runoff rates, to justify system improvements, for example; desalination, better purifying components and dredging works.
Traditional water development works required very large capital outlays that called for government financing, via the World Bank, the United Nations Development Programme (UNDP) or other international financial agencies, to fund the work; plan, implement, construct and commission.
Such development projects, considered as humane, employed very long-term debt with very low interest rates and in many cases, were written off and forgiven based on unavoidable economic declines.
Small water delivery projects, benefiting thousands of people and connecting communities, were funded by accessing, free money via aid and grants.
Freeness always leads to abuse, bribes paid for single family estate connections, contracts awarded to unqualified and incapable friends and family, purchase orders for missing items, and padded invoices, were all skillfully accounted for before commissioning.
Financial waste in daily operations, through perceived political intervention in hiring requirements, the award of contracts and procurement practices, is well known but difficult to stop or prosecute and can only be reduced or eliminated via private sector participation; where values outweigh votes.
A state-owned and operated water company will, from generation to generation, continue its inefficient practices, as many are proud to have their children employed by or with such an operation, a government job for life.
But such inefficiencies cannot be allowed to continue, during a lengthy economic recession. Led by the International Monetary Fund (IMF), lending agencies both foreign and domestic, and bondholders are demanding transparent prudent oversight; checks and balances, before considering further funding proposals.
Handing over expansion projects and routine maintenance to investors as opposed to bondholders, in exchange for more operating efficiency, less corruption and regulated returns, may seem as privatisation, the selling out of the national patrimony, by many workers’ unions.
But unless government’s national budget can fund the water company’s substantial net annual losses or the government is prepared to increase water rates across the board, investors are required, inclusive of employees’ pension plans and workers’ unions.
Listing a small percentage of the operation, the majority retained by the government, on the stock exchange, with the Securities and Exchange Commission’s enforced rules, will offer comfort to such desperately needed individual investors. Please note the water company does not and cannot own the water.
International best practice shows that state-built assets are best operated by individuals with a commitment to performance based rewards, who will respond to current economic circumstances, supply and demand issues, and implement strategies to limit downtime.
Management contracts will demand proactive approaches to negative issues and reward the surpassing of preset goals. No more forcing of square pegs in round holes, purchasing of inferior items at exorbitant prices, or kickbacks on the award of contracts. The mission is quality water on demand.
Terrance A. Jennings