The Fijian Competition and Consumer Commission (FCCC) has endorsed the Government’s decision to corporatize the Water Authority of Fiji (WAF). This initiative is poised to boost WAF’s operational efficiency and financial sustainability, ensuring enhanced 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 crucial step forward to guarantee that all Fijians receive reliable and high-quality water services.”
He added that the transition aims to promote greater efficiency and financial stability within WAF, which is vital for the nation’s growth and development. Kamikamica emphasized the government’s commitment to collaborate closely with the FCCC to develop a fair and transparent water tariff structure that balances sustainable operations with affordability for consumers.
In this process, the FCCC will evaluate the water tariff structure to ensure it reflects the actual cost of service provision while staying 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 allows WAF to earn only a fraction of the income needed for sustainable operations and investments.
FCCC CEO Joel Abraham noted that corporatization could lead to cost-reflective pricing, with tariffs set to cover the complete cost of providing water services, including operational costs, maintenance, and capital investments. While this ensures financial viability, consumers might face higher tariffs.
Abraham highlighted the FCCC’s pivotal role in overseeing tariff setting under corporatization, ensuring the tariffs remain fair, transparent, and justifiable, balancing the entity’s needs with consumer protection. Increased operational efficiency from this change could also lead to cost savings, which, if passed on to consumers, could offset tariff hikes.
The structure of tariffs might evolve, introducing various pricing tiers or mechanisms such as fixed charges, volumetric charges, or seasonal pricing, reflecting the true cost of water usage and promoting conservation. Abraham mentioned that robust stakeholder engagement, including consultations with consumers and industry stakeholders, will be essential in the tariff-setting process post-corporatization.
A corporatized WAF may focus on infrastructure investments to enhance service delivery. While these investments might result in higher short-term tariffs, the long-term objective is to improve service quality. Performance-based regulation might also be adopted, linking tariffs to performance indicators like service quality, efficiency, and customer satisfaction, incentivizing the achievement of regulatory standards and better service delivery.
To aid the transition, FCCC will engage external consultants with expertise in urban planning, utility regulation, financial modeling, and tariff setting. These consultants will provide crucial insights and recommendations to develop a robust and equitable tariff structure and help WAF achieve its operational goals.
By leveraging external expertise, FCCC seeks to bolster its regulatory capabilities, manage the transition effectively, and protect consumer interests, ensuring that any changes in water tariffs are justified, transparent, and in the best interest of Fijian consumers.
FCCC is dedicated to supporting WAF through this transformative period, with the hope that corporatization will ultimately lead to improved water services, sustainable operations, and fair pricing.