The Fijian Competition and Consumer Commission (FCCC) has expressed support for the government’s decision to corporatise the Water Authority of Fiji (WAF). This move is intended to improve WAF’s operational efficiency and financial stability, ensuring better water services for Fijians.
Deputy Prime Minister and Minister of Trade, Honourable Manoa Kamikamica, stated, “This is a crucial step towards providing all Fijians with reliable and high-quality water services.” He added that the transition aims to foster greater efficiency and financial stability within WAF, which is essential for the nation’s growth and development.
Kamikamica also emphasized the commitment to work with the FCCC to create a fair and transparent water tariff structure that balances sustainable operations with affordability for consumers. As part of this effort, FCCC will review the water tariff structure to ensure it reflects the true cost of service provision while remaining fair and affordable for consumers.
Currently, Fijians benefit from one of the lowest water tariffs in the Pacific, at 15 cents per 1,000 litres. However, this low rate means that WAF earns only a fraction of the income needed to operate and invest sustainably. FCCC CEO Joel Abraham noted that corporatisation could lead to cost-reflective pricing, where tariffs cover the full cost of providing services, including operations, maintenance, and capital investments. While this may result in higher tariffs, it ensures financial viability.
Under corporatisation, FCCC’s oversight in setting tariffs becomes critical. The commission will ensure that tariffs are fair, transparent, and justifiable, balancing the needs of the entity with consumer protection. Increased efficiency driven by the change could lead to cost savings, which might mitigate tariff increases if passed on to consumers.
Abraham explained that tariffs might introduce different pricing tiers or mechanisms like fixed charges, volumetric charges, or seasonal pricing, reflecting the true cost of water usage and encouraging conservation. Robust stakeholder engagement, including consultations with consumers and industry stakeholders, will be essential in the tariff-setting process post-corporatisation to ensure transparency and acceptance of changes.
A corporatised WAF may prioritize infrastructure investments to improve service delivery, which could lead to higher tariffs in the short term but will enhance service quality in the long run. Performance-based regulation linking tariffs to service quality, efficiency, and customer satisfaction may also be adopted, incentivizing regulatory standards and service improvements.
To support the transition, FCCC will enlist external consultants with expertise in urban planning, utility regulation, financial modeling, and tariff setting. These consultants will provide critical insights and recommendations for developing a robust and equitable tariff structure, helping WAF achieve its operational goals.
By leveraging external expertise, FCCC aims to enhance its regulatory capabilities, effectively oversee the transition, and safeguard consumer interests. This will ensure that any changes in water tariffs are justified, transparent, and in the best interest of Fijian consumers. FCCC is committed to supporting WAF through this transformative period, with the hope that corporatisation will lead to improved water services, sustainable operations, and fair pricing.