WSC’s accumulated deficit over $151 mil.
The accumulated deficit for the Water & Sewerage Corporation (WSC) has increased to over $151 million as of December 31, 2016, according to WSC’s audited financial statements.
The report, obtained by Guardian Business yesterday, shows that the deficit increased by more than $4 million in the span of a year. It previously stood at more than $147 million for the same period in 2015.
The report also shows that the company improved its operating expenses by over $10 million in 2016, when compared to 2015.
The report’s audit was performed by PKF Chartered Accountants and was approved for issuance on May 24, 2017 by WSC’s board of directors.
“The corporation has incurred significant operating losses in recent years, and such losses are projected in the future. The corporation is dependent on funding from the government, and it is anticipated that such funding, via the government’s subsidy, will continue to be made available at a level sufficient to allow the corporation to adequately maintain its operations,” the report states.
The auditors pointed out that WSC received more than $22 million from government in the form of a subsidy to assist with its cost of operation.
Guardian Business contacted WSC Chairman Adrian Gibson yesterday, who said he was “simply astounded” at the deficit.
“I realize that in order to address the deficit at WSC, a number of things must happen. There is a need for greater productivity by staff. In terms of collection efficiency, there must be measures to ensure effectiveness in collecting payments from customers where bills are issued.”
Gibson said a “master plan” will be created to reduce the WSC subsidy on a year-by-year basis, to the point where the corporation does not have to rely on the government subsidy.
“Yes, we can talk about tariff increases but there is no point in having a tariff increase if some of the operating expenses and leakages continue to persist,” he said.
“We have to curb some things and ensure there is significant cost recovery and improvement in the management of expenses.”
Gibson also assured that financial statements would be tabled in Parliament on a timely basis during his tenure as chairman.
The report also notes that “In 2015, a major customer entered into bankruptcy proceedings. Amounts owed by the customer, which continued to accrue under a take or pay supply contract, were fully provided for in 2015 and classified as impaired. In December 2016, the customer settled a substantial portion of the accumulated balance, and the remaining balance, though past due, was deemed to be collectible.”
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