Sunday, March 3, 2024

WUC owed over a billion Pula in water bills

There is almost one certainty about Water Utilities Corporation (WUC): each year when it reports on its financial well being, there is an assurance from the board of directors that it will be able to continue as a going concern, “on the conditions of financial support from government”.

In the accounting world, the ‘going concern’ principle is the assumption that an entity will remain in business for the foreseeable future. Conversely, this means the entity will not be forced to halt operations and liquidate its assets in the near term.

In the case of WUC, this means the shareholder, being the Botswana government, will have to keep the water supply company in business by making some form of cash injection. The corporation has received nearly P600 million in government subvention in the last five years while government grants totalled P3.1 billion over the years. From its end and in a bid to remain as a going concern, WUC in June 2021 increased tariffs for its services. But the two – cash injections from the shareholder and a hike of tariffs are not enough to offset the cash troubles of WUC which are mainly caused by a growing list of debtors.

According to Kefentse Mzwinila, the custodian minister of water affairs in the country, WUC has a growing list of debtors with outstanding bills which has forced the corporation to cut some 136 293 customers off its pipes. As of March 2023 WUC has a debt book sitting at P1.1 billion with 63 percent (P723 million) of the bill reported to be attributed to domestic customers while businesses account for P131 million of the debt.

The debt book is attributed partially to ‘billing’ challenges that the corporation faced in the past. WUC has in the past faced troubles in collecting unpaid bills from customers, at times facing criticism for its irregular billing system that can have wild variations.

In September 2019, WUC issued a request for expression of interest for the provision of connectivity for the smart water internet of things (IoT) project.

According to the tender notice, the service provider was supposed to provide connectivity for the smart water internet of things that will facilitate information exchange for all connected field devices using long range, low power wireless protocol in Gaborone as their first project locality area.

The invitation to tender came a month after WUC said is in the process of introducing prepaid meters to reduce human error during metre reading.

But now Mzwinila says his ministry is in the process of implementing and rolling out alternative advanced technologies for metering.

“The component is called an Automated Device Management System, that is intended to manage all devices at Water Utilities Corporation (WUC) including both post or prepaid,” said Mzwinila in Parliament recently.

 He said the system necessitated installation of smart meters, which were installed first as a pilot in Nanogang School, and another batch of 1, 000 meters were installed in Village in Gaborone.

“The Corporation is currently in a process of running a proof of concept for prepayments on smart meters, which will be concluded within the next 12 to 16 weeks,” he said. Mzwinila also disclosed that WUC is not out rightly going for prepaid meters, but rather smart meters which have the capability of both pre-payment and post-payment. It is estimated that the installation of smart meters will cost about P1.5 billion. The implementation of smart meters will be outsourced to the private sector as a metering service over the next three years, from the third quarter of 2023, the minister said.

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