Águas do Algarve management today said that it wants to take over the responsibility of supplying water to the end user, a business that until now the region’s councils have carried out, often at a huge mark up.
Águas do Algarve's director Isabel Soares says that only by controlling the supply to the end user, and taking over the billing, can it equalise the price and assure customers of the quality of the water supplied.
Isabel Soares, the highly controversial mayor of Silves before moving to Águas do Algarve, said today that the company currently is responsible for the collection, treatment and supply of water to 16 Algarve municipalities but now she wants to take supplies directly to consumers.
The quality argument is a smoke screen - Soares argues that only by controlling the whole supply chain can she assure customers of clean, bug free water and stop the practice of councils using borehole water as if it was treated and certified water from the supplier.
This may be so, but hides the real reason which is to halt and reduce the €60 million debt she is owed by the Algarve's councils.
"Right now, we have the towns of Olhão, Vila Real de Santo António and Castro Marim asking for studies to be undertaken for us to supply them," said Soares.
The transfer of supply responsibilities may well involve Águas do Algarve purchasing or leasing the current water processing equipment and plant from councils.
For those councils that owe money, the water company can credit them with the agreed value of their plant and equipment and thus start to write off their debt while taking over the service.
Vila Real de Santo António council confirmed that Águas do Algarve has made a preliminary presentation of its intention, and that when it sees a concrete proposal that shows the advantages, the council executive will consider the case.
The president of Castro Marim council, Francisco Amaral said he was available to work on a proposal, especially if it ensured quality water and allowed for the connection of the council area's remaining houses to the mains, a job that the council has no money for.
The current tariff for water from Águas do Algarve is the same for all councils but the wildly different tariffs charged by councils to their end users is a source of annoyance to many customers, especially those living in Albufeira where the mark up is astronomical.
The councils long ago developed the ploy of selling water to households at inflated prices and then not paying the supplier, thus building up huge debts and crippling Águas do Algarve’s ability to invest in new facilities.
This debt burden has been allowed to mount up because the councils own a majority of the shares in Águas do Algarve making annual general meeting more interesting than the norm, especially any discussion on the comany's debt level.
By managing the entire water supply in the region, Águas do Algarve would be able to control revenue, swap debt for capital and stamp out the councils' practice of not paying their bills.
Comments
It should be lower than the lowest price the councils currently pay if with this the debt burden will decrease.