WUC posts P121m �artificial� profit
Pauline Dikuelo | Wednesday December 14, 2016 18:00
The parastatal’s financial results for the period showed it realised revenues of P1.3 billion in the year while expenses stood at P1.57 billion. This left the corporation with a loss of P242 million and in a state that makes it unable to operate as a going concern.
Auditing firm, Delloite said the loss incurred was before taking into account the P388 million tariff subsidy grant received from the government during the year.
“This condition indicates the existence of a material uncertainty that may cast significant doubt about the corporation’s ability to continue as a going concern,” said the auditors.
Deloitte further stated that board members have made an assessment of the corporation’s ability to continue as a going concern and believe that continued financial support from the government and the revision of tariffs will ensure that the corporation continues as a going concern in the future.
In July this year, the former minister of Minerals, Energy and Water Resources Kitso Mokaila told Parliament that the government owed WUC P130 million in unpaid bills.
But government’s water bill has now ballooned to P267 million, assistant minister of Land Management, Water and Sanitation Services, Itumeleng Moipisi updated Parliament yesterday. According to the financial results, WUC was owed P259 million in receivables as at the end of March 2016.
The P121 million profit for the year is up from a loss of P377 million in the previous year where WUC only received P1.8 million subsidy from government.
The corporation’s woes emanate from the ambitious 2009 Water Sector Reforms Programme under which it began taking over the supply of water to all urban centres and villages. The reform programmes inflated the WUC’s operating expenses, while commensurate support, even by way of tariff adjustments, was not forthcoming from the treasury.
The WUC has struggled in recent years, failing to pay workers and meet its obligations. The corporation needs P1.5 billion for operations and another P10 billion to spruce up and develop its infrastructure.
The WUC is reportedly embarking on another round of retrenchments, the fourth round in recent years.
In the financial report, the auditors also said they noted that title to certain land and buildings acquired by the corporation from the Department of Water Affairs and the Ministry of Local government under the Water Sector Reforms Project have not yet been transferred to the corporation.
The auditors said the corporation anticipates the title to the assets to be transferred in due course. The mandate for the corporation is to provide potable water supply and wastewater services in the whole country.
The mandate was expanded in accordance with the 5-year water sector reforms project that was implemented in May 2009 and was completed in April 2013.