While Government was announcing that it is clearing backlogged bills from vendors, it would appear now that utility bills were being placed on the backburner; in fact, Premier and Minister for Finance, Dr. the Hon. D. Orlando Smith has disclosed that Central Government’s electricity bill is $13,389,638.72 in arrears and its water bill is $3,421,862.04 totaling in arrears.
The BVI Leader made the announcement during the House of Assembly on 20 April in response to questions about the monies government owes to the two departments. The questions were asked by Leader of the Opposition, and First District Representative, Hon. Andrew Fahie.
The Premier first admitted that Government owes a large sum of money to the BVI Electricity Corporation, but noted that it would take time to clear the debt: “Madam Speaker, as of 31st March, 2017 the amount of arrears outstanding to the BVI Electricity Corporation by Central Government is $13,389,638.72. Madam Speaker, given the value of the arrears it will take some time to bring the outstanding amount currrent.”
Nonetheless Hon. Smith said that Government is trying hard to reduce the current balance. “Madam Speaker, I can, in fact, report that a payment of $1.5 million was made on 12th April, 2017, and the outstanding balance will be managed according to payment arrangements that will be negotiated with the BVI Electricity Cooperation.”
The Minister for Finance was however unable to give a direct reason why the amount became so high: “Madam Speaker, the cause of the arrears is multi-fold. Each Accounting Officer within the Government service is responsible for ensuring that all expenses incurred under their heads are properly managed.”
“It is the responsibility of the Ministries/Departments to ensure that once bills are received they are processed in a timely manner as payment can only be made once these bills are processed. Unfortunately this process has not been as timely as it should have been in some instances. Additionally, if during the budgeting cycle funds allocated to the respective sub-heads are insufficient and savings cannot be realized from elsewhere then it is likely that these Departments would not have been in a position to make payment. Finally, Madam Speaker, the amount outstanding also includes amounts owed in relation to the supply of electricity to the various water plants across the Territory,” the BVI Leader further explained.
Nonetheless, the Premier explained that steps to regularize the situation commenced since September: “Madam Speaker, after recognizing the challenges being faced with paying utility bills in a timely manner, a decision was taken by my Government in September 2016 to centralize the payment and management of all utility bills (telephone, water and electricity). To facilitate this process, since 1 January 2017 the responsibility for payment of utility bills has been placed with the Telephone Services Management Unit.”
“It is hoped that by centralizing these payments the payment process would be carried out in a timely manner thus avoiding the difficulties that have been encountered over the last several years,” Hon. Smith added.
The Premier explained that he did not have a full understanding of the total amount of debt the Government racked up with the Water and Sewerage Department. However, he noted that it is more than $3M: “Madam Speaker, as of 31st March, 2017 the amount of arrears outstanding to the Water and Sewerage Department by Central Government is estimated at $3,421,862.04. Madam Speaker, we hope to have a better idea of the true outstanding debt by 30 September 2017 as the Department is currently working towards reconciling its figures,” the Premier noted.
However, Hon. Smith stressed that Government will not be able to clear the amount it owes on its water bill overnight: “It will take some time to bring the outstanding amount current; however, as noted the Department is currently going through a reconciliation exercise at the end of which it is expected that the Department and Central Government will work together to regularize the accounts.”
It was also disclosed that the bills go as far back as 2004 but the cause for the accumulation is said to be unknown: “The arrears date back to 2004. It is uncertain what transpired then, but my understanding is that there may be a number of factors that can account for the arrears, including improper billing, as well as untimely billing and payments. Madam Speaker, it should be noted that since 2012 the Water and Sewerage Department has been working with the Treasury Department and the respective Departments to receive information from them as to what journals had been submitted for payments but have not cleared.”
Notwithstanding, Hon. Smith said that it is agreed that it is necessary to account for amounts owed for water used on a monthly basis as it is the proper and responsible thing to do. As such he said that the Department has been working to remedy this situation.