Cost reflective pricing formula on the cards for water supply
The National Water Supply and Drainage Board (NWSDB) is to adopt a cost-reflective pricing formula to improve its financial situation enabling it to pay their loans without burdening the Government, a top official of the board divulged.
The estimated marginal cost of water supply of Rs. 16.50 per cubic metre in the short run, rising to Rs. 47.25 in the long run, suggests that water is under-priced under the current pricing regime, he said.
NWSDB is continuing its public service with unpaid water bills of consumers running up to billions of rupees, the official said.
He revealed that arrears of payments of defaulters include domestic customers, government departments, state institutions, parliamentarians and private commercial institutions amounting to a staggering Rs. 6.2 billion. Of this over Rs.1 billion had been defaulted by public and private institutions, government officials and politicians, he disclosed pointing out that over Rs. 10 million of water bill arrears will have to be recovered from politicians.
The state entity has been able to increase the pipe borne water and safe drinking water supply in the country to 54.9 per cent and 95 per cent, respectively in the first four months of 2022 compared to the same period of 2021 of 53.7 per cent and 93.8 per cent, respectively amidst the massive operational losses including administrative costs.
During this period the NWSDB was able to complete three large scale projects, six local bank funded projects, and 91 ‘Water for All’ projects, by adding 197,207 new connections to the system, a Finance Ministry report revealed.
This contributed to the 11.3 per cent increase in revenue of the water supply board for the first four months in 2022 to Rs. 9.27 billion.
Revenue in the corresponding period of 2021 was Rs. 8.32 billion. However, the NWSDB recorded an operational loss of Rs. 663 million for the period of first four months this year against the operational profit of Rs. 122 million of the previous year due to the increase in administrative expenses.
It has incurred this massive loss of amidst rising salary costs and 25.8 per cent of the output bringing no revenue, official data showed.
A Ministry report said that costs went up mainly due to an 18 per cent rise in the salary bill.
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