Water utility targets resorts and schemes in decade-long revenue improvement plan
The National Water Commission, NWC, will seek to turn the tide on water wastage with a multiyear project aimed at conservation, and tapping into Jamaica’s thriving tourism sector and housing boom.
It forms part of plans to reduce the water that flows through its system but generates no income due to leaks or theft, otherwise termed ‘non-revenue water’. Droughts along with leaks result in intermittent supplies, at times, across sections of the island. The utility hopes that plugging the leaks, along with new infrastructure, will improve the reliability of the service, making it attractive for large complexes to plug into the network.
“An additional objective of the project is an increased level of opportunities for investment in small and medium-sized commercial resorts and housing due to reliable water supply service being realised. This objective will be measured by the increase in NWC’s customer base,” stated a pre-qualification document seeking the services of an engineering consultant for the Islandwide Non-revenue Reduction Programme released on Wednesday.
The inventory of hotel rooms stand at about 31,000, with plans to grow that number to 50,000 in five years. Concerning housing solutions for Jamaicans, Prime Minister Andrew Holness aims to build 70,000 units in the medium term via the National Housing Trust, the Housing Agency of Jamaica, the New Social Housing Programme and other government initiatives.
NWC is the premier water provider, but some resorts and new housing developments also contract independent water companies to augment supplies.
The utility’s project envisages dramatic cuts in wasted water supplies.
“To achieve this objective, the islandwide level of non-revenue water must be reduced from the current level of 80 per cent, which refers to the islandwide figure outside Kingston & St Andrew [at 43 per cent] to the target level of 30 per cent. This objective will be measured by the number of customers receiving a continuous supply of water and by the level of non-revenue water in each system and in aggregate,” NWC stated in the bid document.
In December, the Office of Utilities Regulation, OUR, hosted a public forum online, during which the NWC unveiled plans for some US$470 million in investments over several years to upgrade the island’s water infrastructure. These investments are aimed at reducing lock-offs due to drought. Of that figure, US$303 million will go towards addressing non-revenue water.
The pre-qualification document on Wednesday stated that NWC would divide Jamaica geographically into two lots to encourage competitive contracting. Eligible firms seeking to win the contract need to generate “a minimum average annual construction turnover of US$12.5 million, and US$25 million for the two lots”.
The project will not only aim for a drastic reduction of water loss, but will also focus on enhancing the billing and collection rate of the NWC.
“The contractor is expected to assist NWC for an increase of the bill collection rate from about 90 per cent to 96 per cent,” stated the document.
The successful engineering consultant will drive the process over 11 years, with the potential to extend the contract for an additional two years.
The 11 years consist of seven years of implementation and a sustainability period, starting in the eighth year until the end of the contract.
The initial phase of the project will develop a detailed condition assessment of each major water system, which will serve as a blueprint for specific strategies to be implemented in subsequent years. During this period, the NWC will set performance targets and determine the sequencing of work across parishes.
Under the co-management model, a combined project team comprising staff from both the NWC and the contractor will be established. The water utility will bolster its in-house expertise through comprehensive training for team members, and will set up a dedicated unit responsible for overseeing the contractor’s adherence to performance indicators.
National Water Commission is projected to generate $53 billion in annual revenue by year ending March 2024, compared to $45.7 billion in FY2023. A surplus of $2.4 billion is projected for FY2024, but tax credits are expected to push the figure to as much as $3.9 billion.