The Karachi Water and Sewerage Board (KWSB) would recover water charges from its consumers at a rate of 10 percent of the Karachi Electric Supply Company (KESC) charges that would be included in the power utility’s bills.
Well-placed sources in the KWSB told Pakistan Today that the proposal was discussed in detail in the KWSB Board of Directors meeting recently chaired by KWSB Acting Vice Chairman MPA Haji Munawar Abbasi. After the meeting, the water utility’s senior officials approached the KESC and reportedly finalised the modalities about inclusion of 10 percent fixed water charges in the power bills, they said.
The initiative is expected to help enhance revenue collection using a broad-based data of consumers with an effective recovery mechanism. The sources said that unlike other public service providers, the KWSB had not been allowed to pass on increases in costs to its consumers.
Over the past 10 years, the disparity in the increase of KWSB rates (only 60 percent) can be witnessed from comparison with the rise in the Consumer Price Index (141.2 percent), price of high speed diesel (467 percent) and raise in salaries of government employees (221.7 percent). Financial problems at the KWSB stem from a number of causes, including poor billing and recovery process, irrational tariff that does not enable cost recovery, and a variety of operational and maintenance inefficiencies.
Currently, the KWSB has the income to pay the salaries of its staff but not sufficient to pay the bills of he KESC. Besides collection of bills through the KESC, it was also decided during the meeting that the cost of electricity supplied to the KWSB would be reduced, losses and pilferage at KWSB pumping system be controlled and tariff structure of the KESC rationalised.
According to the sources, the KWSB officials were of the view that federal and provincial governments’ levies and charges added by the KESC to the KWSB’s bill should be immediately withdrawn or a subsidy be provided to the water utility, as this would provide financial relief to the KWSB, which is working on a non-profit basis.
The net bill invoiced to the KWSB by the power utility includes government charges to the tune of 46.51 percent. The levies include federal government’s additional surcharge at 32.41 percent of the net KESC bill and general sales tax adjustment at 13.73 percent, and Sindh government’s electric duty at 0.64 percent.
Under the new billing system, the integration of KESC and KWSB dues will lead to issuance of a common bill on mutually agreed basis, as per the KESC database.
The 10 percent charges of the KWSB might be separately shown in the bill and the amount would be deposited directly to the water board’s account. The inclusion of KWSB dues in the KESC bills would bring the majority of consumers in the tax net, increasing the water utility’s revenue recovery and, thereby, allowing the KWSB to pay the bills of KESC on regular basis, the sources said.
