Water Commission Explains Dredging Fee

IN April 2013, the National Water and Sewerage Commission established and approved a “Dredging Fee” for the purpose of de-silting the John Compton Dam.

The Water and Sewerage Company (WASCO), in their application for a tariff review, had stated that the amount to dredge the Dam was $6 million and that the project should not take more than two years to be completed. As a result, the Commission believed that if the dredging would take only two years to be completed at a cost of six million dollars, then it was necessary to decouple the cost for the dredging from the new tariff, since the dredging was more consistent with a project. Hence, the 10.43 percent was decoupled from the general tariff increase.

The commission said that for all intents and purposes, the 10.43% is a grant/ “free loan” granted to WASCO to correct the myriad of challenges faced by the Dam to meet the needs of the consuming public. This grant / “free loan” does not require re-payment but is condition based. In that regard, the Commission, was of the view that the conditions contained in the Final Determination Notice 2013 were not sufficiently sound and therefore required reassessment. Hence, the Commission commenced the process of reviewing the conditions with the view to making them more robust.

IT added: “The process for developing these new conditions started in January 2015 and involved consultation with It added: “key stakeholders. The issuance of additional rules / conditions is not unprecedented, neither unique to Saint Lucia. The Office of Utilities Regulations (OUR) of Jamaica indeed did likewise with the energy sector’s Electricity Improvement Fund (EIF).

“On May 18, 2015, the Commission released an order containing additional conditions for managing the “Dredging Fees”. These conditions are intended to strengthen the regulator’s oversight of the “Dredging Fee”.

As at April 30 2015, the Dredging Fund account balance was reported at EC $8,433,235.19. Funds from this account have been used for the payment of a study commissioned to delineate the way forward for the dredging project. Additionally, there is a shortfall balance of EC$1,683,983.74 which WASCO has been working towards eliminating, the commission said.

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