Govt proposes increases to Water and Sewerage rates, Bahamasair fares

In keeping with its mandate to make state-owned enterprises (SOEs) more self-sufficient, the government has plans to approve increases in rates at the Water and Sewerage Corporation and fares at Bahamasair, to help the government achieve $100 million in cost savings.

Minister of State for Finance Senator Kwasi Thompson made the revelation while outlining the government’s Fiscal Strategy Report in the Senate yesterday.

Thompson said there are several recommendations currently being considered by the government to reach its cost-savings goals with SOEs across the medium term, which include the introduction of properly phased-in cost recovery measures slated to commence by mid-2021 for Bahamasair and the Water & Sewerage Corporation.

“The Water and Sewerage Corporation has required significant and unsustainable outlays from the public purse for a long time. This is largely as a result of policy decisions that essentially limited the corporation from adjusting its fees for over 20 years. We will be requiring the board to provide a plan to achieve a proper cost recovery model that allows users of the service to substantially cover the costs of operations,” he said yesterday.

“This may include and is not limited to adjustments in rates, while protecting those most in need. It will also likely include a shift to a monthly billing cycle for all customers. The corporation will also be required to pursue operational efficiencies by improving use of technology and rationalizing its cost base.

“In the case of Bahamasair, which has also been a significant drain on the public purse, the government has accepted the board’s recommendation to undertake in short order, the necessary fare adjustments and operational changes that will eliminate the need for reliance on government subsidies over time. This will allow the airline to become more competitive as it pursues full cost recovery.”

The Economic Recovery Committee (ERC) – mandated by the prime minister to develop solutions to help dig the country out of the COVID-19 economic crisis – suggested sweeping reforms of SOEs in its executive summary report tabled in Parliament in October.

The government provides an average subvention of $400 million to support SOEs each year.

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source https://thenassauguardian.com/govt-proposes-increases-to-water-and-sewerage-rates-bahamasair-fares/