Karachi’s water board may be looking at a new fiscal nightmare as it will be spending more than it earns. If this continues to be the case, then no new lines or networks will be laid as there won’t be enough funding for development projects.
“Only 17% of people pay their bills,” explained MD Misbah Uddin Farid. “And bulk consumers in the public sector owe us Rs11 billion.” Violence in the city indirectly affects bill payment and collection.
On average, the utility generates Rs350 million a month but its adminstrative costs are double. Things are so bad that the board stopped paying its electricity bill which comes to about Rs300 million a month. It is, however, working on a strategy to settle the dues. Needless to say, no new projects have been undertaken in 15 months.
One of the major problems is that at least 400 lower-ranking staff have been hired and their salaries and pensions cost approximately Rs230 million each month.
“Our top priorities are to pay salaries and pensions, medical expenses and water filtration and chlorination costs,” says Farid. “The board is generating revenue that only meets these expenses so it won’t be able to pay for new infrastructure.”
Emergency repairs, such as those needed when lines burst during power breakdowns, or damaged pumping stations cost above Rs70 million. The board needs to pay Rs25 million for diesel to run its standby generators.
The water tariff for retail consumers is the lowest in Asia as the board charges only Rs40, Rs58 and Rs96 per month for houses 60-, 80- and 120-square-yards big.
Published in The Express Tribune, July 11th, 2011.
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