Minister explains losses, pins it on service provider function
The Minister of Works, Transport and Infrastructure, Papali’i Niko Lee Hang, has reiterated that government-run service providers will always struggle to make a profit.
“They are not in the business of making money,” said the Minister. “Rather they are there to provide the service and they charge minimum rates to ensure their services are affordable.
“So we expect them to cop the losses and they will continue to accumulate the losses in the years to come.”
The Minster offered the view in response to questions from the Samoa Observer over the performance of the Samoa Water Authority (S.W.A.) and the Electric Power Corporation (E.P.C.). Papali’i’s portfolio covers both.
The quarterly losses for E.P.C. for July–September 2018 published by the Ministry of Public Enterprises totalled $374,000.
Minister Papali’i explained that the E.P.C. losses are a result of their efforts to minimize the cost of electricity for the country.
“As I said to you earlier, losses are expected and will continue to accumulate and this is regarding E.P.C. and S.W.A.”
In the 2018 financial year, accumulated losses for the S.W.A. amounted to $54.35 million.
The bad debts recovered for that year totalled $330,782 which was an increased from $116,962 in the 2017 financial year.
“The Samoa Water Authority's main objectivity is to serve the community and they are not there to make money off of our people,” Papali’i said.
He explained that S.W.A. charges their fees at the minimum and if funding is short, they will cop the losses and continue to work in the red to provide the necessary service.
“Water and electricity is a daily necessity every living person needs. And even if they make a profit it would be minimal and it will go back to improve the service.”
The Minister said the E.P.C. and S.W.A. should not be compared with other state entities such as Samoa Land Corporation, Samoa Airways and the Ministry of Revenue and Customs.
"They are there to make monies to assist with the development projects in the country while E.P.C. and S.W.A. are there to provide the service," reiterated the Minister.