The Fijian Competition and Consumer Commission (FCCC) has expressed support for the Government’s decision to corporatise the Water Authority of Fiji.
The initiative aims to improve WAF’s operational efficiency and financial sustainability, ensuring better water services for all Fijians.
Deputy Prime Minister and Minister of Trade, Cooperatives, Micro, Small and Medium Enterprises, and Communications, Honourable Manoa Kamikamica, stated, “This is a pivotal step forward towards ensuring that all Fijians have access to reliable and high-quality water services.”
He added, “This transition is designed to foster greater efficiency and financial stability within WAF, which is essential for the continued growth and development of our nation.”
He also mentioned, “We are committed to working closely with FCCC to develop a fair and transparent water tariff structure that balances the need for sustainable operations with the importance of affordability for our consumers.”
As part of this process, the FCCC will thoroughly examine the water tariff structure to ensure it reflects the true cost of service provision while remaining fair and affordable for consumers.
Currently, Fijians pay one of the lowest water tariffs in the Pacific at 15 cents per 1,000 liters.
However, this low rate has resulted in WAF receiving only a fraction of the income necessary for sustainable operations and investments.
“Corporatisation may lead to cost-reflective pricing, where tariffs are set to cover the full cost of providing water services, including operational costs, maintenance, and capital investments. This shift ensures financial viability but may result in higher tariffs for consumers,” said FCCC CEO, Joel Abraham.
“FCCC’s role in overseeing tariff setting becomes crucial under corporatisation. We will ensure that tariffs remain fair, transparent, and justifiable, balancing the needs of the entity with consumer protection.”
He explained that increased operational efficiency driven by this change could lead to cost savings, which, if passed on to consumers, could mitigate tariff increases.
“FCCC will monitor these efficiency gains and their impact on tariffs.”
“The structure of tariffs might change, introducing different pricing tiers or mechanisms such as fixed charges, volumetric charges, or seasonal pricing, reflecting the true cost of water usage and encouraging conservation,” Abraham elaborated.
Robust stakeholder engagement will also be required in the tariff-setting process post-corporatisation, including consultations with consumers, industry stakeholders, and other affected parties to ensure transparency and acceptance of tariff changes.
A corporatised WAF may prioritise investments in infrastructure to improve service delivery.
While the cost of these investments may lead to higher tariffs in the short term, the long-term goal is to enhance service quality.
Performance-based regulation may also be adopted, linking tariffs to performance indicators such as service quality, efficiency, and customer satisfaction. This approach aims to incentivize meeting regulatory standards and improving service delivery.
To support the transition and ensure successful implementation, FCCC will hire external consultants with expertise in urban planning, utility regulation, financial modeling, and tariff setting.
These consultants will provide critical insights and recommendations to develop a robust and equitable tariff structure and help WAF achieve its operational goals.
By leveraging external expertise, FCCC aims to enhance its regulatory capabilities and oversee the transition effectively while safeguarding consumer interests, ensuring changes in water tariffs are justified, transparent, and in the best interest of Fijian consumers.
The FCCC is dedicated to supporting WAF through this transformative period, hoping the corporatisation process will lead to improved water services, sustainable operations, and fair pricing.