Guma Valley Water Company
The attention of the Management of Guma Valley Water Company (GVWC) has been drawn to a publication in the STANDARD TIMES NEWSPAPER dated Friday March 25th, 2022 with the misleading headline: “OVER LE2.6BN CHOPPED….AT GUMA VALLEY”.
We want to inform the general public and our stakeholders that the headline is not true, and the issue of GVWC’s PAYE Tax liability to the National Revenue Authority has been taken out of context. We want to inform the public and stakeholders of the following:
- This is a long-term issue—GVWC carries a PAYE Tax liability on its books (from as far back as 2010, not just for 2018/19), which the company itself reported in its draft financial accounts for 2018 & 2019. The accounts were audited by external Auditors and confirmed in the 2020 Audit Report. This Management and Board have taken on the challenge to find a permanent solution to this long standing issue;
- Low Cashflow from low tariffs—The main reason for the non-compliance with statutory obligations is that GVWC did not have the cashflow to completely address its tax liability with the Government. The tariffs were very low, with high water wastages and theft of water. The revenue generated from the sale of water is what is used to fund the operations and maintenance activities (to pay staff salaries & wages, purchase of chemicals, diesel, pipes & fittings, etc.). The priority of the company has been to continue to fund its operations fully, including fighting leakages and extending services into poorly served areas, and not allow its service to degrade;
- Debt Swap—As the outstanding payments by MDAs to GVWC for services (currently over Le23 billion) far outweigh GVWC’s total tax liability to Government, the company has been engaging the authorities over the past 5 years to effect a debt swap that will enable GVWC to clean up its financial books. This is the best option, otherwise the commitment GVWC has made to service the tax liability with payments of Le250 million per month will take a few years to fully resolve the issue, and risks diverting resources away from the provision of quality services to the people of Freetown. It will not be wise for the company to be fully tax compliant, yet struggle to fully fund the purchase of chemicals for water treatment, or diesel fuel to operate pumping stations. Management will continue to push for the debt swap as the quickest means to settle its tax liabilities.
So no money was “chopped” as alleged.
The Board of Directors, Management and staff of GVWC have worked very hard to improve the quality of service, and expand the reach of the service in Freetown. To this end, we have:
- Reduced water losses significantly through a program for replacing spaghetti pipes and improving response times to pipe breakages;
- Extended the distribution pipe network significantly into communities that are poorly served (for example, Wilberforce, Aberdeen, Kingtom, communities east of Freetown, etc.);
- Managed the system very well. Even though the rainfall last year was low, we are still sending over 75,000 m3/day to Freetown, which is unprecedented for this time of the year. Normally during the month of March, the flow to Freetown would have dropped to below 60,000 m3/day;
- Maintained the Community Services Operations (water kiosks and trucking of water to un-served communities) with little external support for the service. When was the last time you heard the phrase “Dry Season Water Crisis in Freetown” being used?;
- Protected all company facilities within the city;
- Strengthened the capacity of the institution for improved service delivery;
- Attracted large development support and investments from the Government and Development Partners for the short- & medium-term projects that will expand access to water supply in some communities in the Western Area Rural;
- Established a roadmap, with the Freetown Water Supply Masterplan Studies, for expanding the service significantly in line with the National Development agenda.
The next phase in the growth of the company will push to attract huge investments that will increase the capacity of stored raw water during the rainy season, with the construction of a new dam in the No.2 River water catchment, and other dams in similar sites in Hamilton, Hastings, Waterloo, Kongo, Toothik, Orugu (with a big question mark), Big Water and York Villages.
This is the aspect of our work that we want the media to help tell our story, as a good corporate image will make it much easier to attract the necessary development capital for the highlighted strategic projects, which will provide everyone access to safe clean drinking water supply in the Western Area by 2030.
If you have any questions, please reach out to the Communications Unit on +232 76 620 208.
Date: 28th March, 2022
Guma Valley Water Company
Guma Building, 12/14 Lamina Sankoh Street,
Freetown, Sierra Leone
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