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Jamaica utility firms report heavy losses

by: - August 3, 2018
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(Jamaica Observer) The island’s utility companies have reported that so far this year they have lost more than US$35 million combined to theft of service and equipment, which is affecting not just their bottom line, but service to customers as well.

The revelation was made at a webinar hosted by the Office of Utilities Regulation (OUR) on Tuesday in Kingston.

The webinar, entitled ‘Do the Right Thing: How Theft Impacts your Utility Services’, saw, for the first time, representatives of all the major utility companies — Jamaica Public Service (JPS), National Water Commission (NWC), telecoms firms FLOW and Digicel — converging to speak on this issue and how it has been impacting them and their customers.

Director of losses operations and analytics at JPS, Rasheed Anderson, said the light and power company estimates that approximately 200,000 households and commercial entities are stealing electricity. This compared to the approximately 600,000 legitimate customers on its system.

“When persons steal electricity, it impacts the quality and reliability of our power,” Anderson said. “It damages equipment that are essential to serving you, and we have seen in many instances where sometimes people are out of power due to persons stealing from us.”

He said that, so far this year, the company spent US$32.2 million on fuel which has not been recovered. This compared to US$70.8 million last year.

Charles Buchanan, the NWC’s corporate communications manager, said that company estimates that between 12 per cent and 30 per cent of the water it produces is stolen.

According to Buchanan, approximately 250,000 to 300,000 connections are involved in the theft of water.

“We categorise the instances of theft affecting our operations in primarily four ways — infrastructure theft; theft from our employees which has created significant issues in our ability to carry out work in certain areas; theft in our watershed areas; and theft of service and supplies,” Buchanan explained.

Watershed theft, he said, includes theft of land by squatters; theft of tree cover, which is not only critical to the prevention of soil erosion and heavy siltation into reservoirs but helps rainfall.

“We continue to see illegal connections, meter tampering and meter bypasses, illegal use of water from hydrants, and illegal commercial and other types of consumption,” Buchanan said.

Yesterday, Buchanan told the Jamaica Observer that it was difficult to state an exact dollar figure on the losses due to varying rate structures for the NWC’s clients. However, at the webinar he said that the significant levels of theft are costing the water company millions of dollars annually.

The representatives from Digicel and FLOW reported that they are also being significantly impacted by theft and vandalism of cables, generators, batteries, and fuel.

Director of corporate communications and stakeholder management at FLOW Kayon Mitchell said so far this year approximately 51 communities have been affected by theft and vandalism, costing FLOW US$1.9 million to restore services. This compares to US$6 million to restore services in 2015 and 2016.

Anthony Barrows, Digicel’s group head of field operations management, said that expensive equipment, including batteries placed at cell sites, are being stolen and sold for scrap metal.

According to Barrows, the batteries, which cost the company approximately J$80,000 each, are being sold for scrap metal for less than J$2,000 each.

The OUR has been putting the spotlight on theft of utility services and equipment and has launched a media campaign on this issue.

According to OUR Director General Ansord Hewitt, apart from the losses experienced by the utilities and the subsidies that have to be borne by customers, he is also deeply concerned about the disruption to economic life, the risk to life and limb, and the inconvenience imposed on the country by this practice.