Cash-strapped water utility needs to slash spending and revise water tariffs every year
Cash-strapped water utility needs to slash spending and revise water tariffs every year
In revising the pay and allowances in the Kerala Water Authority (KWA) this week, the State Government has set certain “general conditions” and goals which require the cash-strapped water utility to slash spending and revise water tariffs every year.
The conditions are in line with the observations made by the 11th Pay Revision Commission (PRC) on the shaky state of KWA finances while recommending the pay revision last year. The Water Resources department had issued orders this week implementing the revision with retrospective effect from July 1, 2019.
“The authority must adopt stringent measures to ensure economy in expenditure. It should undertake regular annual revision of tariffs and make extra efforts to collect dues, including arrears,” the order said.
It may be recalled that a KWA proposal for revising water tariffs is pending before the government.
Further, the government has made it clear that the expenditure on account of the revision should be met from the internal resources of the KWA and that the government will not shoulder the responsibility ”under any circumstances.”
The KWA must enter into a memorandum of understanding with the government on physical and financial performance milestones to be met each year.
Goals include reduction in “non-revenue water” (water lost in distribution), increase in water and other tariffs by 5% and energy efficiency targets. This is meant to ensure that the utility can meet the burden caused by the pay revision from its own pocket.
KWA “must strive to achieve to surpass income over expenditure continuously before the next pay revision besides maximum customer satisfaction, and Government will thoroughly watch the next 5 years’ performance of KWA (including effective & efficient utilisation of project funds, various agreements etc…) and the next pay revision shall only be considered by the Government based on this period’s performance,’‘ the order noted.
With the revision in force, the lowest pay is now ₹23,000 and the highest, ₹1,66,800.
While recommending the pay revision in July 2021, the 11th PRC had noted that since the KWA is facing a resource crunch, it should cut down on spending and go for annual tariff revisions. At the time, the PRC had observed that the accumulated loss of the KWA had grown from ₹ 1702.9 crore in 2012-13 to ₹ 3343.76 crore in 2019-20.
The previous pay revision in KWA had come into effect on July 1, 2014.