- 06 July, 2017:
With the water reform project, the World Bank forecast is that after five years, the Central Water Authority (CWA) would achieve regular supply of water all year round and achieve financial equilibrium through the performance improvements and tariff reforms. Water losses in the distribution system would have reduced.
The Acting Prime Minister and Minister of Energy and Public Utilities, Mr Ivan Collendavelloo, made this statement on 4 July 2017 at the National Assembly. He was speaking about the water reform project aimed at addressing the problem of water supply in Mauritius.
He announced that the World Bank has confirmed that the Global Infrastructure Facility (GIF) will provide a total of US$ 875,000 to support the preparation of the project, of which US$ 475,000 has been allocated for the advisory services to be provided by the World Bank and US$ 400,000 to the International Financial Corporation. The Government will contribute US$ 400,000, for which a provision of Rs 14 Million has been made in the 2017/18 budget, he stated.
Mr Collendavelloo recalled that Government had appointed the World Bank in December 2015 to conduct a study on the reform of the distribution and supply of water and provide strategic advice and support for the design and implementation of a Private and Public Partnership for the CWA and for potable water sector reform. In February 2017, Government agreed to the implementation of the recommendations of the World Bank and enlist the services of the World Bank for advisory services, and the International Financial Corporation as Transaction Adviser, he added.
A team of the World Bank team carried out a study which highlighted that Mauritius is classified as a water-stressed country and is expected to fall under the water-scarce category by 2020. The aquifers are over-exploited and rainfall is unpredictable due to climate change.
The World Bank recommended a holistic solution to redress CWA’s financial situation, plan future investments and attain the target of 24/7 water supply. The Bank has proposed the appointment of a Private Operator to operate and maintain the potable water distribution system of the CWA on a 15-year affermage contract.
Under this contract which is a public-private sector arrangement, the private operator is responsible for operating and maintaining the utility but not for financing the investment. It does not own the infrastructure. It would also share capital planning functions with CWA to ensure consistency of capital expenditure with improved performance targets. The operator would finance minor investments in technology and equipment, said the Acting Prime Minister.
According to Mr Collendavelloo, any increase in revenue arising from tariff increase before or after the affermage contract will be to the benefit of the CWA and not to the private operator. He added that the operator will be paid a fee based on key performance targets such as improved service quality and reduction of water losses.
He emphasised that the CWA will remain a parastatal organisation and continue to own all the water supply pipelines, the water treatment plants and service reservoirs. It will monitor the service provided by the private sector operator and will be responsible for business planning, capital expenditure and proposing customer tariffs, he said.
Speaking about employment at the CWA, the Acting Prime Minister underscored that there will be need for an additional 400 employees to achieve the service delivery improvements, bringing the total number of employees from 1400 to 1800. Employees will be offered the opportunity to join the private sector operator with additional incentives and there will be no compulsory termination of employment or redundancy, he said.