SWM, EBS and SLM: years of mismanagement ultimately always come with a bill

The financial problems at Surinaamsche Waterleiding Maatschappij (SWM) should not be treated as though something has suddenly gone wrong at a single state-owned company.

According to director Clifton Lienga, SWM has approximately SRD 700 million in debts to creditors. At the same time, the company has around SRD 300 million in outstanding receivables. Of that amount, about SRD 100 million is reportedly owed by the government itself.

But anyone looking only at SWM misses the larger problem.

By now, we know this story. We see it at SWM. We see it at Energiebedrijven Suriname (EBS). We see it at Surinaamse Luchtvaart Maatschappij (SLM). And we also see it at hospitals and other parastatal institutions.

Time and again, the same question returns: how much money must the State still put into companies and institutions before it finally acknowledges that subsidies without reform are not sustainable policy?

The government is itself a defaulter

The fact that the government itself reportedly has around SRD 100 million in unpaid bills at SWM is telling. The same government that expects citizens and entrepreneurs to meet their obligations does not always pay its own bills on time.

How can a state-owned company function in a financially healthy manner when one of its largest customers, the government, itself creates payment arrears?

Outstanding bills cannot replace pipelines. They do not maintain pumps or finance necessary investments. Then we wonder why problems arise with water pressure, discoloured water and ageing infrastructure.

Water costs more than consumers pay

According to the SWM director, the cost price of one cubic metre of drinking water is around SRD 90, while the current tariff is approximately SRD 41.

That difference has to come from somewhere.

A government may consciously choose not to require citizens to pay the full cost price. That can be a social choice. But there must then be a clear plan.

Who pays the difference? How much does that subsidy cost annually? Which groups is the support intended for? How long will the system remain in place? And how much money meanwhile remains available for maintenance and investments?

When there has been no clear answer to these questions for years, the problem is not solved but postponed.

EBS: the same pattern

At Energiebedrijven Suriname as well, we see what happens when tariffs, investments and actual costs are not properly balanced for years.

Electricity must remain affordable. That principle is understandable. But production capacity costs money. Maintenance costs money. Fuel costs money. Generators, power plants and expansion of the network cost money.

Suriname has recently again experienced what a shortage of available production capacity means: loadshedding, hours without electricity and uncertainty for households and businesses. These problems, too, do not come out of nowhere.

When necessary investments are postponed and tariffs are determined mainly on political considerations, rather than being structured in an economically and socially responsible manner, the moment eventually comes when the system begins to crack.

Then emergency capacity is sought. Then multimillion-dollar investments are announced. Then the State must step in again.

Why does policy in Suriname so often begin only after the crisis has already broken out?

SLM: millions available, but where is the accountability?

At Surinaamse Luchtvaart Maatschappij, the situation may be even clearer.

The State is currently making approximately USD 2 million per month available to support SLM. At the same time, there has been discussion for years about the absence of current public annual reports and full financial transparency.

That lack of financial accountability must not be normalised.

Every entrepreneur knows that you cannot keep putting money into a company indefinitely without knowing exactly what comes in, what goes out, how high the debts are, what losses are being incurred and when the company should be able to stand on its own financially.

At a state-owned company, that oversight should be even stricter. After all, it is not private money. It is money belonging to society.

The problem is not called SWM

We must therefore guard against reducing the current discussion to just one conclusion: SWM charges tariffs that are too low.

The problem is much bigger.

It concerns a governance culture in which successive governments have postponed difficult decisions for too long. Too often, short-term political interests have outweighed sustainable financial planning and the national interest.

Tariffs are kept artificially low. Losses are covered. Debts pile up. Investments are postponed. Maintenance falls behind. Political appointments, inadequate assessment of expertise and weak oversight sometimes only make the problems worse.

And when it is no longer financially viable, the State treasury is looked to once again.

That is not an incident. That is a system.

Years of mismanagement have a price

It is easy to say today that water should become more expensive, electricity should better cover its costs, or that SLM should operate more efficiently.

But we must also dare to name how we got here.

This did not arise in one year. It is the result of years of delay, political interference, inadequate oversight, poor financial discipline and too few structural reforms.

Not just one government bears responsibility for this. This problem has grown under different governments.

Every new government has the responsibility not to pass these problems on to the next one again. Otherwise, we will keep going in the same circles.

Subsidy is not the same as policy

There is nothing wrong with subsidy when it is targeted and necessary.

A low income must not result in someone being unable to access clean drinking water. A vulnerable family must not be left without electricity because it cannot pay the full cost price.

But subsidies must reach the people who actually need the support.

For example, social basic tariffs could be used for vulnerable households and higher tariffs for large consumers. Support can be linked to income. State-owned companies can be required to publish current financial figures annually. Management can be given concrete performance and reform targets before state support is provided again.

And above all: public money must not be transferred indefinitely without clear conditions and oversight.

Transparency first, then the bill for citizens

When SWM states that the cost price is approximately SRD 90 per cubic metre, society must be able to see how that cost price is structured.

How much goes to personnel? How much to energy? How much to maintenance? How much to chemicals and depreciation? How large are the losses in the network? How much water produced ultimately goes unpaid?

The same applies to EBS. And certainly to SLM.

Citizens cannot be the final destination every time for years of administrative failure.

Before tariffs are increased further or millions are again taken from the State treasury, there must be maximum transparency about the figures, the causes of the deficits and the measures being taken to prevent recurrence.

The bill never disappears

Suriname has tried for too long to postpone difficult choices through subsidies, covering deficits and shifting problems forward.

But a bill that is not paid today does not disappear.

It gets bigger.

At SWM, we now see approximately SRD 700 million in debt. At EBS, we see how backlogs in capacity and investments ultimately affect the electricity supply. At SLM, we see how the State continues to make millions available while current financial accountability and public annual reports are absent.

These are not three separate stories.

It is one story.

The story of a country in which action is too often taken only when years of mismanagement present their bill.

And that bill ultimately almost always ends up with the same person:

The citizen.