POL price increase puts WASA in dire straits

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LAHORE – The Water and Sanitation Agency (WASA) is fast heading to bankruptcy as its budgetary deficit is about to surge from Rs 3 billion to 3.5 billion with the increase in petroleum prices. Out of Rs 3 billion, deficit attributable to electricity bills is Rs 2.5 billion. After the increase in petroleum prices, under the new fuel adjustment charges, electricity bills are bound to jack up, inflating WASA’s bills by Rs 500 million annually. Sources in WASA told Pakistan Today that the Punjab government allowed WASA to sell all its scrap with immediate effect and use that money to cope with financial crisis. However, WASA officials claim that scrap money will only be a drop in the ocean and could not help the agency to survive in the days to come.
‘SET TO BE DOOMED’: A senior official in Finance Department said WASA was ‘set to be doomed’ as Punjab government had denied issuing any financial grant despite repeated requests. So much so government also turned down the request to increase water tariff to cut its deficit, he added. He feared that around 420 tubewells supplying water to consumers will be switched off as Lahore Electric Supply Company (LESCO) had warned to suspend the electricity if the outstanding amount Rs 2.5 billion was not paid at earliest. And if it happens in summers, public unrest will be ‘inescapable’, he added.
He said last year LESCO disconnected power supply to WASA for not paying power bill. Though the power was restored when the personal staff officer (PSO) to the chief minister intervened, he said, but as the WASA and LESCO had yet to resolve the matter, it will be the people who will suffer. “During the election campaign in NA 123, citadel of PML-N, WASA had to spend Rs 100 million on water supply and drainage projects but could not release the amount to contractors who completed these projects owing to ongoing financial meltdown. Now contractors had blacklisted WASA and announced not to work for WASA in future,” he maintained.
MEASURING OUTFLOW: In order to generate the revenue to bring down deficit, WASA planned to change the system into metered water. At preliminary stage, WASA Finance Department had issued orders to install 7,300 water meters, WASA official said. “Total metered connections stand at 550,000. In past, WASA has already installed 56,848 water meters in different areas including Allama Iqbal Town (19,633), Shalimar Town (7,595), Aziz Bhatti Town (3,130), Ravi Town (7,371), Nishter Town (6,894) and Data Gunj Bux Town (12,225).
He said water meters had also been installed in 69 tubewells and they would also be installed at all remaining tubewells soon. He said that meter system would provide data about how much was released from source side (tubewells) and how much was received at consumer end, so that WASA could calculate each drop of water supplied to the consumers. However, it will take more than 10 years to complete the project which means that at present there was no solution for financial stability, he said.
RAISING REVENUE: Sources said that Lahore Development Authority (LDA) allowed WASA to get sewerage charges from all private housing schemes to increase its revenue and more than 40 percent housing societies got stay orders and thus the move could not be fruitful.
“Strong nexus between WASA’s revenue officials and sitting MPAs is a big hitch in the recovery of Rs 2 billion; outstanding amount from residential and commercial defaulters. Owing to the fact, WASA’s ongoing recovery collection drive is still dismal as only a limited recovery could be made possible. If recovery drive had hit the desired targets, WASA could have overpowered its financial shortfall,” sourced revealed.
DEFAULTERS: Sources said apart from other commercial and residential defaulters, a number of government departments had to clear their arrears. Sources said LESCO has to pay Rs 700 million while PHA has to pay Rs 100 million to WASA. Pakistan Railways and CDGL have to pay Rs 4.5 million and Rs 3 million respectively, while health, education, police, forest and P&D departments are also defaulters of million of rupees. There are 400 commercial defaulters who have to pay Rs 300 million.
WASA spokesman Imtiaz Ahmed said some loopholes had been plugged to minimise the deficit. “Medical policy had been changed, fuel consumption had been reduced to 50 percent and 800 work charges had been terminated so far,” he added.