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Holder, representing the Barbados Labour Party's issues in the Senate, made the comment in the Upper House yesterday.

Noting that water remained an essential item for any country, Holder said that its want was an inelastic demand, which meant an increase in price would not bring about a substantial change in the quantity of the good used.

"The Barbados Water Authority is the sole seller of water in this country, and all consumers must use it," Holder noted.

"Regardless of the price charged, the amount of usage will not decrease substantially, and that is from a pure economic perspective. That is why we speak to methods of conservation," the first-time senator added.

According to Holder, the questions should be therefore asked, if the BWA should be seen only as a commercial entity, and whether the provision of water was seen as a social good.

"The aims and objectives of a private entrepreneur are distinctly different from that of a social service," he told members of the legislative chamber.

"The aim of the state in the provision of water must be that all persons must be able to have that service.

With a private entrepreneur, profit maximisation is the over-riding factor.

"If we examine the BWA, its aim is profit maximisation, so the question must be asked: Should the BWA be seen in the light as that akin to private entrepreneur?" Holder asked.

He said that given the fact that the BWA was a state-owned organisation, the question could also be asked if that was the same thing as existed with the Barbados Light & Power Co. Ltd.

He then queried how an increase of 60 per cent in water rates could be justified only in terms of either seeking a profit, and or a return on an investment.

"Given the fact this is a monopoly, it has the capacity to practise what is termed price discrimination.

"That is, the provision of the same service to a wide range of people, but at different prices," Holder claimed.

Source: Nation Newspaper, February 18, 2010.
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