NASSAU, BAHAMAS — The government’s directive to cease disconnection of residential consumer accounts upon the onset of the COVID-19 pandemic has resulted in a nearly $13 million shortfall in payments since last March, according to Water and Sewerage Corporation (WSC) Executive Chairman Adrian Gibson.
The corporation’s receivables in May stood at $45.5 million and it has a total of $34.6 million outstanding to vendors, according to Gibson. During his contribution to the 2021/2022 budget debate yesterday, he noted that 2020 was a challenging year for the corporation and although this year has been slightly better, 2021 has also been challenging.
“We have been beset by both the COVID-19 pandemic and the continued recovery and reconstruction efforts in Abaco in the aftermath of Hurricane Dorian,” said Gibson.
“We are also further constrained by our caring government’s mandate of ‘no disconnections’ from March of 2020. Despite our constraints, we have kept the water on throughout the length and breadth of the Bahamas.
“WSC is facing unprecedented challenges due to a combination of circumstances.”
Gibson noted a substantial reduction in cash collection due to the impact of Hurricane Dorian on Abaco, the corporation’s second-highest revenue generator, and the COVID-19 pandemic.
“COVID-19 has had a devastating impact on WSC’s cash flow. There was an overall decrease in cash collection of $11.514 million or 19 percent from $60.884 million year-to-date December 2019 to $49.369 million for the same period of 2020,” said Gibson.
“Additionally, there is a decrease in 2021 cash collection of 24 percent or $5.17 million from $21.4 million year-to-date May 2020 to $17 million year-to-date May 2021.”
He added: “The directive for WSC to cease the disconnection of residential customers’ accounts upon the onset of COVID-19 has resulted in a shortfall of residential customers’ payments for the period March to December 2020 of $11.46 million. The year-to-date shortfall to May 2021 is $1.5 million.
“The reduction in cash collection has resulted in an increase in WSC accounts receivable. Accounts receivables have grown from $38.7 million in January 2020 to $45.5 million in May 2021. This is an increase of $6.8 million or 18 percent. The receivable balance outstanding to WSC by government as at May 31, 2021 is $4.37 million.”
Gibson noted the reduction in cash flow has also resulted in an increase in WSC accounts payable.
“As at May 31, 2021, WSC has a total outstanding to vendors of $34.6 million. This includes $25.8 million that is outstanding for water purchases,” he said.