CABINET HAS approved the drafting of new water sector legislation to facilitate private sector involvement in the industry.
The new Act will, among other things, allow for the licensing of providers and provide a regulatory framework, in which the role of the Office of Utilities Regulation (OUR) will be clearly defined.
Dr. Paul Robertson, Minister of Development, made the announcement while making his contribution to the 2003/2004 Sectoral Debate in Parliament. He was giving an update on developments in the utility industry and the activities of the OUR, which now reports to his office.
He said the OUR was embarking on a study to determine the optimal market structure for power generation, once the Jamaica Public Service Company's (JPSCo) exclusivity for new generation capacity comes to an end next year. The study will also provide the guidelines for a seamless transition from the current system of operation to one that is demand driven, a Jamaica Information Service news release said..
Prime Minister P.J. Patterson said in March that the Go-vernment was moving to encourage private sector participation in the supply of water. Then, he pointed to local and foreign private sector participation in a US$39 million investment in a new water project in Hanover as signal of full recovery of the local financial sector, as well as growing confidence in the Jamaican economy.
He said that amendments to the NWC Act to remove the power of the NWC to grant licences have been drafted and that the Government would be establishing a new licensing regime for all service providers - both public and private - through a new Water Supply and Sewerage Act.
The move followed the creation of the Office of Utilities Regulation (OUR) as an independent rate setter to ensure that private investors could be guaranteed a fair rate of return on their investments, even while protecting consumers from the inefficiencies which may arise in the delivery of utility services.
The OUR received a budget of $132 million to carry out its regulatory activities for fiscal year 2003/04. The contributions are derived from the regulatory fees paid directly by the utility companies of which the water sector pays $20 million.
