Garbage and Sewage Tax Audit a MUST

Kemar J.D Stuart, Economist and Director Business Development , Finance and Investment Stuart & Perkins Caribbean

As the 2023 budget looms, the IMF program BERT 2.0 specially focuses on SOE reform. Is it a coincidence that most SOEs are crying broke? In the Sunday Sun , The general manager of the BWA made some earth shattering revelations in regards to the economic , financial and social survival of the island’s sole water management entity.

The financial state of the water utility company has been hampering its ability to fully tackle water woes in Barbados due to mismanagement of its resources and other structural problems such as cost/price imbalances. Currently the due for disconnection stamps are coming in on water bills for amounts as little as $80. Letters from BWA to collect arrears are destabilizing many households who just can’t afford to clear their BWA arrears.

There’s all justification now for the government to cut the GSC tax on water bills as GM Keithroy Halliday pointed out that the BWA had sought permission to borrow from the Garbage & Sewage Contribution as it was unable to meet its “financial obligations”. The fact that this tax which earned over $344M is being collected directly by the BWA was never transparent.

The financial statements of BWA since last we were informed by Minister Ryan Straughn, are not up to date which is in contravention of the new public financial management act, if found to be so. However the public hardly ever sees financial statements of an entity like BWA so where was it ever transparent ?

Not only should ICAB and the Bar association comment on the legality and transparency? But this action by BWA financially deprived the Sanitation Service Authority of their legally entitled share of their GSC. The NUPW general secretary can confirm that one of the reasons put forward for denial of hazard pay increase and other negotiated benefits is the fact that BWA has not been paying the garbage component to the SSA.

The transparent and traditional process is for the BRA whose mandate is tax collection to collect the $344M earnings of GSC. This allows for public and parliamentary vigilance. The absence of this $344M GSC tax revenue in the estimates and budgetary proposal further raises concerns.

The consolidated fund of government should be where all requests are made to borrow and disperse tax payer dollars which is usually made by the Minister/PS in charge. This request is called a transfer from the government. However to meet the IMF condition of cutting transfers from the government to SOE’s the government implemented a policy to divert the collection of the GSC from the consolidated fund directly to the BWA and took away parliamentary oversight of the funds collected. By using the consolidated fund BWA ,SSA and the government would be in a better financial position to tackle this issue.

The IMF BERT 2.0 focuses on SOE reforms and the economic conditions of CBC, Transport Board, GAIA , BWA and SSA represents conditions based on IMF recommendations, are ripe for privatization.

Frequent changes at the management level paint an unstable work environment at the BWA hence why the government sought to enter public private partnerships to improve the operations of the entity Former Water Resource Minister Charles Griffith revealed and introduced that PPP’s will be a heavy focus moving forward. The Government had established a 20-member National Advisory Committee on Water to advise the administration on matters related to the precious commodity.

On the committee is Dr Clyde Mascoll who is government’s special advisor on public financial issues, Ian Carrington, Director of Finance and Economic Affairs, BWU leader Toni Moore, along with major business moguls suggests a major overhaul and correction is planned for the water authority in terms of restructuring its business and management model.

In this depressed environment and to live up to its initial agreement with the IMF to cut money transfers to SOEs, the government is finding it difficult to continue to subsidize water rates , and difficulty in offering direct financial relief to BWA and to households and businesses. The only option according to actions taken by other countries under IMF programs, is to cut further spending to the water authority and forge private outsourcing of the entity’s operations. The formation and characteristics of the committee , the financial state of BWA & IMF conditions affirm that the BWA is trending in the direction of privatization

While debating Dr Clyde Mascoll on VOB down to brass tacks when he was questioned about the privatization & price increases of BWA, he said that his government is seeking the right price of water. His view is in lockstep with the IMF as since 2007 the IMF recommended that to achieve savings, adjustment of the prices of utilities and public services to reduce the budgetary impact of across-the-board subsidies and costly price imbalances were necessary.

Government should be cautioned that Automatic adjustments upward in regulated prices in water will be a point of contention for the public under any privatization plan. I predicted there will be an increase in the cost of water via implementation of a water levy

Traditional methods of transfer of water services to private hands will see the establishment of a private water company or statutory board with the signature and transfer of management rights over to these new institutions. This will see the rise in the cost of water to recover the cost of the investment that will be spent to carry out works on projects and a permanent increase to recover the loss of financial input and subsidy from the government.

13 thoughts on “Garbage and Sewage Tax Audit a MUST

  1. The financial state of the water utility company has been hampering its ability to fully tackle water woes in Barbados due to mismanagement of its resources and other structural problems such as cost/price imbalances. Currently the due for disconnection stamps are coming in on water bills for amounts as little as $80. Letters from BWA to collect arrears are destabilizing many households who just can’t afford to clear their BWA arrears.


    The reason the BWA can’t supply all households with water 24/7 is because there isn’t enough water to go around.

    Disconnection may reduce demand but will not be conducive to social harmony.

  2. That is why I had to alert them that I will request a refund if they don’t collect my garbage. Now they are coming on Saturdays.

    Taking money for garbage collection and spending it on water delivery.

    Soon we will no longer have garbage collection.

    Back to square one!

  3. SOEs the BWA being one that has had to suffer at the hands of the political directorate. We can only have to look to many years of reports laid in parliament authored by the auditor general. We have reached a point many independent minded observers have no confidence in our ability to competently manage our affairs.

    The blogmaster had hoped that coming out of the Cahill fiasco there would have been some learnings to fast track to a relevant waste to energy model. Such a model would have assisted the BWA an SOE burdened with a huge fuel/fossil/energy bill. The same for GAIA although it seems photovoltaic is being integrated into its energy model.

    After many years of talking renewable energy it seems as usual we are at the mercy of Light & Power as it relates to how it prefers to ‘consume’ intermittent energy i.e. renewables. Are we there yet?

    • “SOEs the BWA being one that has had to suffer at the hands of the political directorate. We only have to look to many years of reports laid in parliament authored by the auditor general.”

      @ David

      On Monday, Frebruary 12, 2018, while introducing the Appropriations Bill in the House of Assembly, then Finance Minister Chris Sinckler admitted that, while government’s financial management and audit rules are applicable to government departments, SOEs do not have an Act to similarly govern their financial operations, which he identified as one of the major challenges with reporting expenditure of resources and their financial position at anytime during the financial year.

      He said ‘government’ intended to rectify this situation by undertaking reforms to SOEs through the introduction of a new Financial Management and Audit Entities Act to govern their financial affairs.

      Priority was also supposed to have been given to the regulation of the financial reporting and debt management of SOEs, as part of a programme to improve their efficiencies as well.
      Sinckler also revealed Barbados received a technical mission to assess the SOEs, through CARTAC and the International Monetary Fund.

      Was this new Act ever enacted?

      This announcement came approximately 4 years after Sinckler said in January 2014, ‘government’ was reviewing the functions of 19 SOEs.
      Some of the Statutory Corporations would be closed, a consolidation of operations for others, while a few would see the involvement of the private sector where feasible.

      Successive BLP and DLP administrations have used Statutory Corporations to provide employment contractual service agreements for their supporters.

      National Assistance Board, for example, through its Housing Welfare Department, provided ‘Welfare Houses,’ house repairs, etc.
      In August 1997 the Owen Arthur BLP administration closed Housing Welfare to facilitate the establishment of TWO (2) SEPARATE statutory corporations, Urban Development Commission (UDC) and Rural Development Commission (RDC), both of which only served to DUPLICATE the same functions that were previously undertaken by NAB.

      In other words, Arthur essentially established TWO (2) SOEs, to be staffed by 2 Directors, Assistant Directors, Accountants, Assistant Accountants, Senior Technical Officers, Legal Officers, Secretaries, Messengers and Receptionists in each, in addition to Senior Welfare Officers, Welfare Officers, Technical Officers, Clerical Officers and other support employees…… at the expense of taxpayers.

      Hence, increases in transfers and subsidies to SOEs.


    The problem is most government utilities are ideal for corruption and procurement scams. Anything politicians in countries like Barbados put their hands on will not be profitable as nuff steal will happen. Wha happen to FOIA in our dystopian state of Barbados

  5. As the ‘Integrity in Public Life’ Bill appears in Parliament again, I am left to wonder “why bother?”
    As we approach 5 YEARS since the BLP was first elected, I am forced to conclude given the complete lack of Reporting, that those we elect are just ‘laughing at we’. They do not wish us to know how monies are spent.
    What the Ds began, the Bs have continued. And for ‘love of country’ one is supposed to fall in line and accept it.
    As this article suggests, taxpayers must wait years, and possibly a verbal slip, to discover what the GoB is actually doing.
    Now we will be subjected to a dog and pony show discussing estimates, with not a report in a decade, for most of them.
    When will Bajans revolt, stop paying taxes, and say “no more until we get the reports you are intentionally withholding.”

  6. @ David

    I’m not aware of any legislation or Act, specifically for SOEs that was similarly introduced by Ryan Straughn.

  7. The Financial Management & Audit Act was introduced in 2007 and was ammended several times thereafter.

    I’ll have to read any recent ammendments to verify if any changes were made thereto that are specifically applicable to SOEs.

    • Thanks Artax, was if the view the recent amendments were intended to hold SOEs more accountable for timely submissions of financials. Perish the thought!

  8. @ David

    I don’t believe both the BLP and DLP would make any meaningful efforts to hold SOEs accountable.

    We are all aware politicians use statutory corporations to provide jobs and authorise contracts for party supporters, without oversight by Personnel Administration and Central Purchasing.

    Protocols and procedures are often circumvented by the SOE’s chairman and board members, who are usually political party associates chosen by the minister, who would approve staff appointments on his/her behalf.

    A Transport Minster, for example, could send his/her constituents for jobs at the Transport Board, or have his/her friend’s tender for goods and services approved by the Board appointed by the Minister…… accomplishments that maybe a bit more difficult to achieve under Central Government.

    Ministers also create posts for their supporters. I know of a SOE at which the posts of ‘Contracts Officer’ and ‘Special Assignments Officer,’ were created for the Minister’s friends.

  9. More bad news… I heard many of the new buses are not working.
    Where are you?
    Where did you go?
    Despite all your puff and your puff
    You are not traveling on your much touted new bus.

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