Although the Karachi Water and Sewerage Board (KWSB) is going through the worst-ever financial crisis, the Sindh government has refused to provide the utility with at least Rs 12 billion bailout package citing it’s financial crunch, Pakistan Today has learnt.
In August 2011, the cash-strapped water utility had sought a financial relief package from federal and Sindh governments to clear the outstanding arrears of Rs 12 billion to the Karachi Electric Supply Company (KESC). However, the center had already refused to pay the relief to utility.
Well-placed sources told Pakistan Today that due to poor revenue receipts, the KWSB was in a position neither to pay its monthly electricity bill of Rs 370 million nor clear the arrears of more than Rs 12 billion for the last few 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.
The sources said 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.
Presently, the water utility has sufficient income to pay salaries to its staff members, 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.
The sources further added that KWSB had decided to enhance revenue collection by using a broad-based data of consumers with an effective recovery mechanism besides reducing cost of electricity, exercising control over losses and pilferage in the KWSB pumping system, and rationalising the tariff structure of the KESC.
However, it seems the plan has been put in cold storage following the pathetic attitude of the authorities concerned and change of administrative systems like nazims and the commissionerate systems.
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 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 required 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.
Moreover, the sources said the water utility not fallen under the jurisdiction of Sindh’s Local Government Department and the parent department was responsible to run it in a befitting manner.
