One of the hopes for the New Year is the increase of socially responsible behavior by government and businesses the cultivation of the understanding that water among others must be respected and revered as life giving rather than seen as a means for profit and the consideration of the impacts of privatization policies on the community. Alas mass privatization agendas of revenue-producing government agencies such as Guam Waterworks Authority and the Port Authority will increase the cost of living and doing business on Guam. As a result it will put a greater strain on the economically challenged of which women and children are a large part; its impact on the development of our children will affect generations to come.
The currently proposed performance management contract is designed to mask the harmful elements that are so plainly apparent in the concession model. The full cost of recovery that reimburses the contractor all the costs incurred exists because funds are already allocated prior to the bond sale. The reasonable rates of return another harmful element of the concession model also is present but in the form of "hidden" fees such as periodic fixed fees which do not have to be linked to performance as opposed to what the PMC proponents are trying to sell.
Because of the undisclosed fees of the PMC privatization it is unclear how high the cost of water will be for consumers. However the baseline rate increases to repay the $103 million bond are expected to be 8% every year for the next five years. Thus not including privatization or the additional borrowing needed to complete the EPA projects rates will at least increase $34 a month to $50 a month for the average household (100 000 gallons/year); $152 a month to $223 a month for average business (400 000 gallons a year); and $3 800 a month to $5 610 a month for largest consumers (10 million gallons a year).
Notwithstanding the impact of privatization the CCU diversion of funds to the privatization agenda which includes allotting only $70 million of the $103 million raised from the bond market to EPA stipulated projects and potentially setting aside funds for a management contractor and spending over $1 million on a concession bill a proven failure world-wide is costing the ratepayers unnecessarily and putting the community at greater debt risk. Other questionable financial decisions by the CCU and approved by the PUC that will increase the cost of water such as the repayment of the water meter loan with a longer-term loan (30-year bond) and using some of the bond money to create an investment fund should be a cause for concern.
The alternative is to allow GWA to continue making reforms especially now with access to funding. PMC does not make economic or practical sense because many stations are already functioning at 100% and the newly hired Direct Responsible in Charge staff which is federally required serves as on-site managers. It is clear that GWA is understaffed in the critical water and wastewater divisions; therefore it makes more sense to hire more DRCs than contract management services which come at a premium price and will add an unnecessary layer of bureaucracy by duplicating the role of managers already on staff.
Thus the socially responsible course of action is also the most economical and practical; it would be much cheaper for the government of Guam to hire qualified professional personnel as classified employees who can help create a culture of achievement rather than contracting high-priced managers that will make redundant the work of current managers. It also urgent that those who are a part of the community who are concerned about the future of this island to get the attention of our leaders to change policies that are detrimental to the community at-large.
We welcome letters to the editor on issues raised in our pages or other matters of interest and concern. Send your submissions to: P.O. Box 3191 Hagåtña Guam 96932 by fax to (671) 649-8883 or by e-mail to [email protected]. The Journal reserves the right to amend or edit letters as necessary.