THE EDITOR, Sir:
A RECENT Gleaner article headlined ("Chang seeks answers on NWC") rate increase contained several errors of fact and misrepresentations that the National Water Commission must quickly correct.
Firstly, the Price Adjustment Mechanism (PAM) is the approved formula by which changes in the Foreign Exchange Rate, Consumer Price Index (CPI), and electricity rates are reflected as a 'pass-through' on your bill. These are variable costs over which the NWC has no control, but which greatly affect the cost of providing water supply and sewerage services. As such, the National Water Commission does not determine the Price Adjustment Mechanism. It is also to be noted that the Price Adjustment Mechanism is not new and is explained on each bill supplied by the Commission every month for the last several years.
Under the terms of the rate adjustment, the Price Adjustment Mechanism (PAM) has been re-set and the foreign exchange and electricity components applied as monthly adjustments. The Consumer Price Index (CPI) component will be calculated annually with an efficiency gain of 3.5 per cent subtracted from it and will only be applied as of January next year.
Furthermore, the Price Adjustment Mechanism for January was 2.24 per cent and can in no way be described as a "sharp increase".
It should also be noted that the true effective increase caused by the tariff adjustment approved by the Office of Utilities Regulation (OUR) effective January 1, 2004 is really 18%, not 26%. The tariff application from the NWC had been for 42%, despite the confirmed fact that water supply costs have far exceeded the tariffs provided to the NWC. It is also to be noted that the last tariff adjustment (at which time the PAM was re-set) was in February of 1999, five years ago.
The call for an explanation is especially surprising and unfortunate since Dr. Chang has participated in several meetings and exchanges on issues relating to the NWC tariff and proposed improvement projects, including at a public forum in Montego Bay.
Additionally, the Rapid Response Unit is not and has never been a part of the National Water Commission. Nor does the NWC have responsibility for the provision of irrigation services. The National Water Commission (like Parish Councils, other entities and private individuals) merely contract the water trucking services of the Rapid Response Unit of the Ministry of Water and Housing. Obviously therefore, comments relating to the Rapid Response Unit or to irrigation services do not thereby relate to the National Water Commission.
The National Water Commission would have been more than happy to set the record straight and disabuse anyone of these falsehoods, had we been asked.
I am, etc.,
CHARLES BUCHANAN
National Water Commission
Corporate Public Relations
Manager
