Hakeem defends water tariff hike

Minister of City Planning and Water Supply, Rauff Hakeem, said the National Water Supply and Drainage Board (NWS&DB) will make a loss of Rs. 9 billion if the water tariff is not increased as proposed.

Defending the proposal to increase the water tariff by 30%, Hakeem said that the revenue from the tariff increase would have prevented this situation next year. He also said the tariff increase was proposed with the view of encouraging better water management and conservation.

“The NWS&DB is not yet a loss-making entity. The proposed project to supply pipe-borne water to all units of the North Central Province where the Chronic Kidney Disease of unknown origin (CKDu) is most prevalent, costs Rs. 150 billion. We have taken loans to implement large-scale water projects in the country. In the coming year we expect to spend Rs. 300 billion on water supply projects. We proposed the tariff hike with these in mind. If we don’t make this tariff increase, we will incur losses. The Treasury cannot always give us concessions,” he said addressing the Cabinet press briefing yesterday.

NWS&DB last revised tariffs in 2012, the Minister said, adding that the increase was a scheduled revision. Sri Lanka has the lowest tariff rates in the region, Hakeem insisted, going on to say that the water tariff was the lowest charged for utility rates, even within the country despite incurring high overhead costs to deliver the service.

“Overheads have been increasing in the last four years and we have not revised these tariffs. So what I feel is an increase of the slab to Rs. 540 for 15 cubic meters is fair.”

Hakeem added that the proposed water tariff hike would have met overhead costs and ensured water supply to most of the population. “We provide pipe-borne water to only 45% of the population. The money we would have received from the proposed tariff hike would have gone towards supplying pipe-borne water to the other 55% of the population.”

The Minister added: “It costs around Rs. 500,000 to Rs. 600,000 to supply water to one house. We do not receive any support towards meeting these capital requirements from the Treasury. We bear the costs of salaries and human resources.”

Minister Hakeem pointed out that Samurdhi beneficiary families would have been exempted from the proposed tariff increase. “What we proposed was that the minimum amount of Rs. 310 be increased to Rs. 540 for a five-member household which uses an average of 15 units of water. I think this is fair.”