The Fijian Competition and Consumer Commission (FCCC) has endorsed the Government’s decision to corporatize the Water Authority of Fiji (WAF). This move aims to improve WAF’s operational efficiency and financial sustainability, thereby 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, described the decision as a crucial step toward providing all Fijians with reliable and high-quality water services. “This transition is designed to foster greater efficiency and financial stability within WAF, which is essential for the continuous growth and development of our nation,” he stated.
Kamikamica emphasized the government’s commitment to working closely with FCCC to develop a fair and transparent water tariff structure that balances sustainable operations with consumer affordability. As part of this process, FCCC will meticulously examine the water tariff structure to ensure it reflects the true cost of service provision while remaining fair and affordable for consumers.
Currently, Fijians enjoy one of the lowest water tariffs in the Pacific at 15 cents per 1,000 litres. However, this low rate has meant that WAF receives only a fraction of the income necessary to operate and invest sustainably.
Joel Abraham, CEO of FCCC, mentioned that corporatization might 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. While this ensures financial viability, it could also result in higher tariffs for consumers. FCCC’s role in overseeing tariff setting becomes crucial under corporatization, with a focus on ensuring tariffs remain fair, transparent, and justifiable, balancing the needs of the entity with consumer protection.
Increased operational efficiency driven by this change could also lead to cost savings, which, if passed on to consumers, could mitigate tariff increases. FCCC plans to monitor these efficiency gains and their impact on tariffs.
Abraham explained that the structure of tariffs might change, introducing different pricing tiers or mechanisms such as fixed charges, volumetric charges, or seasonal pricing to reflect the true cost of water usage and encourage conservation. Robust stakeholder engagement will be required in the tariff-setting process after corporatization, including consultations with consumers, industry stakeholders, and other affected parties to ensure transparency and acceptance of tariff changes.
A corporatized WAF is expected to prioritize 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, thereby incentivizing regulatory standards and improving service delivery.
To facilitate the transition and ensure successful implementation, FCCC will hire external consultants specializing 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, effectively oversee the transition, and safeguard consumer interests, ensuring that any changes in water tariffs are justified, transparent, and in the best interest of Fijian consumers. FCCC is also dedicated to supporting WAF through this transformative period, with the hope that the corporatization process will ultimately lead to improved water services, sustainable operations, and fair pricing.