Jamaica's national water commission to increase tariffs by 19%

Jamaica's national water commission, NWC, plans to increase water tariffs by 19% in an effort to improve service provision and fund capital expenditures, according to an NWC document. The rate increase, effective from April 2013-18, applies to all users including residential, commercial and education establishments. The average monthly bill for Jamaican households is expected to rise from the current J$1,951 (US$19.70) to J$2,516 by 2014. "NWC is making losses with the current tariffs...and the proposed increase in tariffs is absolutely needed to allow NWC to cover costs, maintain its assets, and continue to finance service expansion and improvements," according to the tariff submission document. The average tariff covered just 64% of the average cost of service in 2012. Under the terms of the new tariff structure, NWC has agreed to receive a 0% return on equity in 2014, and from 2014 onwards will only earn a return on equity by increasing efficiency over the period. Expected efficiency improvements are expected to generate sufficient equity to finance a J$87bn capital expenditure program between 2014 and 2018. Key targets for service improvements include an increase in potable water coverage from 53% in 2012 to 75% by 2018/2019, an increase in sewerage coverage from 18% to 37% in the same period and improvements to service reliability. Planned projects include a US$133mn water supply program for the Kingston metropolitan area that will consist of the rehabilitation of water treatment plants, improvements to distribution networks and construction of an aquifer recharging system. This program will be funded by a loan from the IDB.