The cash-strapped Karachi Water and Sewerage Board (KWSB) has sought a financial relief package from both federal and Sindh governments to clear the outstanding arrears of Rs 12 billion to the Karachi Electric Supply Company (KESC), Pakistan Today learnt on Monday.
Sources said that due to poor revenue receipts, the KWSB is in a position to neither pay its monthly electricity bill of Rs 370 million nor clear the arrears of Rs 12 billion since past couple of years.
However, the liability is occurring every month as the KWSB is able to make only a partial payment of Rs 50 million against the bill of Rs 370 million, the sources added.
They said that the KWSB’s financial problems stem from a number of other causes, including poor billing and payment process, irrational tariff that does not enable cost recovery, and a variety of operational and maintenance inefficiencies.
The KWSB currently has sufficient income to pay its staff members their salaries, but not enough to pay the KESC’s bills; however, the operating cost pertaining to electricity charges being one of the most critical issues needs to be resolved on war footing basis, they added.
Sources said that the KWSB has decided to enhance revenue collection by using a broad-based data of consumers with an effective recovery mechanism, besides reducing cost of electricity, exercise control over losses and pilferage in the KWSB pumping system and rationalise the tariff structure of the KESC.
As its first step, the KWSB is taking all measures to control energy losses through refurbishment and regulated use of pumping machinery, the sources added.
They said that the KWSB had thoroughly examined the KESC tariff structure and reached the conclusion that a relief package of at least Rs 12 billion would be needed to clear the outstanding dues of the KESC.
Moreover, for immediate salvage and future financial sustainability, the federal and Sindh governments’ levies and charges added by the KESC to the bill should immediately be withdrawn from the KWSB bills or a subsidy be provided for payment of government taxes in the KESC bill, they added.
