Minister Thondaman stresses need for water tariff hike, while sparing poorest

Without the recent increase in water tariffs, the National Water Supply & Drainage Board (NWSDB) would have suffered an annual loss of 34 billion rupees, Minister of Water Supply and Estate Infrastructure Development Jeevan Thondaman told the Ministerial Consultative Committee on Water Supply and Estate Infrastructure Development, on Thursday (20).

The Ministerial Consultative Committee was chaired by Minister Thondaman and discussed the increase in water tariff that was approved by the Cabinet of Ministers earlier this week.

The Minister told the Consultative Committee that this decision was taken after careful consideration and extensive discussions. The hike is necessary to address the pressing challenges faced by the National Water Supply & Drainage Board (NWSDB) and to maintain the quality of water services, the Minister said.

The recent increase in electricity tariffs, in January 2023, placed immense strain on the finances of the NWSDB. This constitutes a significant portion of the cost of water production, resulting in monthly losses amounting to 500 million rupees.

Moreover, the burden of debt (due to past capital expenditure to expand water infrastructure), was by currency depreciation and high interest rates, together with the exponential increase in the cost of raw materials required to treat water, has led to further monthly losses of nearly 2.8 billion rupees.

Without the tariff increase, the NWSDB will suffer an annual loss of 34 billion rupees, placing its financial sustainability at risk and hindering its ability to deliver reliable and safe water services to the nation, Thondaman said.

The Minister said that in line with the Sri Lankan Government’s commitment to the Asian Development Bank (ADB) and the pursuit of sustainable development, a new water tariff formula and policy will soon be introduced.

Furthermore, though the tariff increase may adversely affect consumers, in a country already grappling with economic hardships, it is important for the long-term viability of the nation’s water sector, the Minister stated.

The Minister stated that the Ministry is committed to protecting the most vulnerable members of our society.

Thondaman said Samurdhi and Tenement consumers, representing the lowest socioeconomic backgrounds, will not see any tariff increases and will therefore continue to receive the necessary subsidies, and are not subjected to any additional financial burden.

The proposed tariff increase also includes provisions to subsidize low water consumers, schools, hospitals and religious establishments aiming to support those who consume less water, come from economically disadvantaged backgrounds and provide essential social services. The monthly water bills of low water consumers will remain below 1000 rupees, the Minister said.

The Ministerial Consultative Committee on Water Supply and Estate Infrastructure Development also took into discussion various concerns pertaining to the water supply in different areas of the country. The Minister directed the relevant authorities and officials present to look into the concerns raised with immediate effect. (SI)