THE Water and Sewage Company (WASCO) must deal with its inefficiencies or find alternative means to fund their capital projects instead of burdening consumers with annual tariff increases.
This was said by the Lesotho Revenue Authority board chairperson, Robert Likhang at a public consultation on the proposed WASCO tariff adjustment.
The inefficiencies include non-revenue water (NRW), operational inefficiencies, legacy costs and inability to connect more users among others.
WASCO recorded 40 percent of NRW in the 2017/18 financial year.
NRW is water that has been produced and is “lost” through leaks, illegal connections or metering inaccuracies and in other countries high volumes of losses negatively affect the utilities’ viability and water quality.
Earlier this year, WASCO filed for a 12 percent tariff adjustment on both domestic consumers and standing charges. WASCO further requested a 15 percent adjustment for commercial consumers and standing charges.
However, Mr Likhang who attended the meeting in his capacity as a business consultant, said WASCO must stop financing its capital projects through revenue raised via tariff adjustments.
“They (WASCO) should find alternative means of raising funds to fund their capital projects,” Mr Likhang said.
“For example, they should issue bonds to raise funds. If they can address the inefficiency in their operations, I believe they can save a lot of money and time so much that a tariff increase will not be necessary.”
Mr Likhang further said WASCO should consider connecting more clients who do not have access to improve their revenue. He said the organisation can use this to manage its operatio0nal costs.
“In a tough economic micro-environment that the country is grappling with, WASCO needs to come up with a leaner structure to dispatch its services.
“Therefore, they have to go back to the drawing board and come up with a new strategy that considers the current situation. They need to do the things right.”
WASCO had also proposed a M269,97 budget which comprised of M234,36 million for water services and M34,61 million for sewerage services.
The company had however, stated that consumption and standing charges for public standpipes and Band A customers would remain at 2017/18 levels.
The Consumer Protection Association (CPA), which also made a presentation at the same meeting, said WASCO should restrict its increase just to cover inflation.
CPA executive director, Nkareng Letsie, said the WASCO proposal was immature as it was formulated based on the electricity tariff estimates while the actual ones are yet to be unveiled.
Mr Letsie also said it was worrying that many consumers were resorting to bottled water as they lack faith in the WASCO water.
Earlier this year there were reports of red worms and high levels of manganese chemical in the WASCO water.
Mr Letsie further advised WASCO to consider producing water for commercial farming purposes, which carries higher tariffs than domestic consumption.
A domestic user who uses 3000 liters of water monthly has to pay M16,44 up from M14.67 if the charges are to be adjusted by 12 percent.