Fiscal Review Committee calls for WAF to be corporatised

The current state of Fiji’s water supply system has prompted the Fiscal Review Committee to call for the corporatisation of the Fiji Water Authority.

The commission said the move would ensure the financial and operational autonomy necessary for the utility to succeed.

In a letter to the Finance Minister, Professor Biman Prasad, a Suva-based lawyer and chairman of the Fiscal Review Committee, Richard Naidu noted the urgent need to improve water and sewerage services.

Naidu highlighted persistent shortcomings in the city’s water supply and maintained that corporatisation would give WAF independence to build sustainable revenue streams and manage its finances and operations more effectively.

This, in turn, will benefit consumers and reduce the financial burden on the government in the long run, the committee said.

The letter was in response to a request from the committee to identify key recommendations from its 2023 report, which contains more than 150 recommendations, for inclusion in Fiji’s next financial year, the 2024-2025 budget.

The committee stressed that despite the additional funding from the Government, the long-term needs of the water authority were still not being met.

“These include ensuring that WAFs have effective, independent revenue streams, greater financial autonomy and the ability to focus on service delivery and better capital expenditure,” the committee noted.

The committee added that recent climate events such as heavy rainfall and landslides disrupted Suva’s water supply, highlighting the urgent need for resilient infrastructure.

“For many unexplained reasons, the effective corporatisation of WAF, including allowing it to implement a pricing mechanism to properly fund its operations and infrastructure, has been neglected for more than 10 years. This has had severe consequences for consumers, investors and government finances, and has often manifested itself in the form of water supply disruptions.

“Most consumers pay a ridiculously low 15 cents per 1,000 litres of water,” the report states, adding that many consumers have not reassessed their ability to pay in the past decade.

The Commission also notes and is encouraged by WAF’s customer engagement survey, which shows that consumers at large are willing to pay more for improved service reliability.

“WAF reports that consumers generally accept charges of at least 50 cents per 1,000 litres,” the report said.

Implementing this rate could triple WAF’s annual revenue from just over $40 million to over $120 million, providing the financial stability needed for major infrastructure investments.

“If the WAF is underfunded due to low water prices, it will continue to burden government general revenue and fail to fund the capital expenditures needed to ensure a better and more reliable water supply.”

The committee noted that the corporatisation of the Fiji Electricity Authority (now Fiji Energy Limited) was successful and could be replicated in the WAF.

“WAF needs to move quickly to an equally regulated commercial basis,” the committee said. “WAF needs to restructure and find additional funding now, rather than later, to make up for the time lost in investing in the necessary infrastructure.”

The financial review committee includes deputy chairperson Lisa Apted, Riyaz Ali, Vani Catanasiga, Edwin Chand, Neelesh Gounder, Matelita Katamotu, Fantasha Lockington, Kirti Patel, Pradeep Patel, Naibuka Sauna and Viliame Takayawa.