Faisalabad WASA facing Rs851 million annual deficit

Continuous rise in electricity rates and delay in approval of tariff summary blamed

FAISALABAD: Due to increasing electricity rates and delays in approval of tariff summary since 2006, the Water and Sanitation Agency (WASA) is facing a huge gap between income and expenditure, causing Rs851.38 million deficit annually.

Being an autonomous body, the agency generates its income with a nominal subsidy from the government of Punjab to meet its expenditure for operation and maintenance of the water supply, sewerage and drainage system, payment of electricity bills, salaries, pensions and allowances, which are being increased almost every year by the government.

However, the revenue generated is hardly adequate to pay the electricity bills, therefore, increase in the tariff which is frozen since 2006 is apparently required to meet the expenses of the agency.

The existing tariff of WASA was approved in 2006. Since then, the government of Punjab has not allowed revision of the tariff due to undeclared reasons.

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Due to the continuous increase in electricity tariffs, WASA is facing difficulties to meet the operational expenses. Despite utmost efforts, while remaining within the frozen tariff and human resources, WASA could increase its billing recovery from Rs745.631 million to Rs1,138.69 million in the last three years, and still is unable to cope with its expenditures, mainly due to abrupt increase in electricity charges.

WASA recovered Rs745.631 million for the financial year 2016-17, Rs974.334 million in 2017-18 and Rs1,138.690 million in 2018-19, hence a 53% increase.

Multistage pumping for both water supply and sewage disposal because of the flat terrain of Faisalabad has increased operation and maintenance cost from Rs51.515 million to Rs444.51 million per annum. The increasing cost of electricity and change in tariff categories by the Faisalabad Electricity Supply Company (FESCO) has increased the cost by 346% since 2006.

The increasing number of pensioners from 700 in 2006 to 1,250 to date has also landed WASA in a difficult situation.

WASA’s total annual income is Rs1,638.257 million while the total expenditures are Rs2,750.767 million, so the net deficit faced by the agency is Rs851.38 million.

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It paid electricity charges, salaries, allowances and pensions with O&M and other expenditures in 2005-06 of Rs449.824 million, which increased in 2018-19 to Rs2,750.76 million, while in 2019-20 it reached Rs3,395.34 million.

The present coverage of water supply and sewerage facilities is 68% and 72%, respectively, in the service area while the recovery is about 71% against the current demand.

To strengthen the enforcement cell, WASA has said that it will disconnect the services of defaulter consumers who don’t agree to pay even on an installment basis.

The civic agency had also taken its financial difficulties to the Punjab government while demanding a bailout package but the request was declined. Resultantly, WASA authorities are hankering after international agencies like JICA of Japan and DFID of United Kingdom to get grants and soft loans but their officials are hesitant to visit WASA offices due to the spread of coronavirus globally.

Published in The Express Tribune, March 13^th, 2020.