- WUC is owed P1.03 billion because “domestic water users consume more water while contributing less to revenue”
Staggering consumer debt continues to constrain business at Water Utilities Corporation (WUC) which is currently operating at a financial loss, the CEO of the parastatal, Gaselemogwe Senai, has said.
Overall customer debt stood at P1.03 billion at year end 2021 against P1.20 billion at end of March 2021, translating to a reduction of P172 million over 12 months, Senai told journalists at a media engagement on the financial report of the parastatal in Gaborone recently. Of this amount, P807 million in debt is attributed to domestic water users. “Aged debt remains a concern, one which we are resolving through intensified debt analysis,” he explained.
“This is supported by steadfast debt collection methods. In the year under review, our major revenue contributor, at 58 percent of total revenue, was Government. Our meter reading efficiency remains on target of over 90 percent. We are working towards ultimately impacting positively on debt, revenue and profitability as these are necessary for service expansion.” Senai noted that the Government of Botswana, through its institutions, is the major source of revenue for WUC that contributed 59 percent with a consumption rate of 1.8 percent. Domestic water users contributed a measly 27 percent to revenue whilst consuming 94 percent of water.
Regarding the controversy of high domestic water bills that surrounds WUC, Senai admitted “excessive estimations” that WUC resorts to when denied access to private property may be to blame. Senai disclosed that the parastatal intends to eliminate this method of billing and is in the process of installing smart prepayment meters that can meet its revenue collection needs and reduce deficiencies in billing. “With a smart prepayment solution, customers will recharge their accounts and accounts debited per actual consumptions as reported by the smart meters that are connected to SAP ISU and the smart prepayment module,” he said.
“With the implementation of the prepayment solution, WUC will process workflows that are necessary to improve customer experience. Examples of this include instituting per account an overdraft facility, reduction of pressure when balance becomes negative, and customer self-flow limiting.” Implementation of smart prepayment is a part of the digital transformation that WUC is undergoing to turn into a digital utilities and centre of excellence in water supply and customer service. Senai said vandalism of WUC property and projects, unbilled water bowsing to augment water supply in areas with severe shortage of water, non-revenue water and operational deficiencies that take into account faults like water leaks and faulty meters are among challenges that the parastatal continues to face.
Meanwhile, WUC has reported a loss before tax of P207.98 million, which a reduction of 18 percent compared to the P253.71 million recorded in 2021. The parastatal has attributed this to favourable movement compared to the previous financial year. However, WUC said its overall results can be summarised as an outcome of negative micro and macro-economic forces resulting from the COVID-19 pandemic and increased inflation. Even so, WUC managed to achieve double-digit growth in revenue, recording an increase of 14 percent in comparison to the prior financial year.
“After a difficult and volatile year for Botswana and the global economy characterised by soaring inflation, increasing fuel prices, higher interest rates, declining liquidity, and the remnants of the COVID-19, the Corporation realised revenue growth of 14 percent (2021:-1 percent),” it says in the report. “Various strategies such as improved billing efficiency, digitisation and clearing of a backlog on new connections were effected during the financial year, culminating in a double-digit revenue growth and a recorded revenue of over P2 billion in a long time.”