THE Private Sector Commission (PSC) and bottled water manufacturers are moving towards a public-private sector solution aimed at reducing the price of bottled water while lowering production costs, strengthening local manufacturing and ensuring savings reach consumers.
The agreement was reached during a further engagement on Wednesday involving Minister of Public Utilities and Aviation Deodat Indar, representatives of Guyana Water Incorporated (GWI), PSC executives and major bottled water producers.
Discussions identified production costs and distribution margins as the two major factors contributing to the price consumers currently pay for bottled water.
Against this backdrop, the private sector proposed a two-phase approach to address the affordability and availability of bottled water.
The first phase would focus on standardising PET preforms used by local manufacturers, where technically feasible, while exploring the establishment of local PET preform manufacturing capacity through a public-private partnership or broader private sector consortium.
PET-related inputs were identified as a significant component of manufacturing costs. Participants said local production of PET preforms could also benefit other industries that depend on PET packaging.
The second phase would examine environmental tax and other input costs, as well as distribution and retail margins.
The private sector cautioned that reducing manufacturing costs alone may not translate into lower prices if significant distribution and retail margins remain within the supply chain.
The lowering or removal of environmental tax and VAT, together with a review of distribution arrangements and retailer mark-ups, was therefore identified as critical to achieving meaningful reductions in the price of bottled water.
Minister Indar indicated that Government will examine the movement of bottled water through the supply chain, including distributors, supermarkets and other intermediaries, as well as the margins applied at various stages.
He also clarified that any Government intervention is intended to address the immediate affordability challenge and does not necessarily signal permanent Government participation in the bottled water manufacturing sector.
The discussions also considered a defined period of Government involvement, accompanied by a clear transition and exit strategy, as a possible component of a public-private arrangement.
The private sector will now prepare and submit formal proposals outlining the manufacturers that would participate in the initiative, opportunities for PET preform standardisation and local production, recommendations on the lowering or removal of environmental tax and VAT, distribution arrangements and a framework for the eventual transition or withdrawal of Government involvement.
The proposals will subsequently be submitted to Cabinet for consideration.
The engagement brought together senior representatives of the PSC, including Chairman Capt. Gerald Gouveia Jr., Vice Chairwoman Kathy Smith, Honorary Secretary Josephine Tapp-Rutherford, Guyana Manufacturing and Services Association (GMSA) President Rafeek Khan and PSC Trade and Investment Chairman Timothy Tucker.
Representatives of major bottled water manufacturers, including Blue Spring Waters, Clear Waters, Pure Waters, Aquafina and Banks DIH Limited, also participated.
Minister Indar was accompanied by GWI Chief Executive Officer Shaik Baksh, Executive Director of Business Development Jaigopaul Ram, Executive Director of Finance Mark David, Monitoring and Evaluation Officer Julie Mingo-Todd and Communications Manager Travis Bruce.
The PSC welcomed the progress made during the engagement and reaffirmed its commitment to working with Government to improve affordability for consumers while strengthening local manufacturing and protecting confidence in private sector investment.
The Commission stressed that the central objective is to lower the cost of bottled water for consumers while supporting manufacturers already investing, producing and creating employment within the industry.