KWA strategy for sustainability, efficiency

Kochi: The expert panel on restructuring the Kerala Water Authority (KWA) has suggested a three-pronged strategy involving realisation of higher revenue, reduction in expenditure and better service delivery to achieve long-term sustainability and organisational efficiency.

The panel, the report of which was the subject of a discussion between the state government and KWA employees unions the other day, has suggested both enhancement of tariff and realisation of KWAs optimal revenue potential as ways to achieve financial sustainability.

The panel report reveals that there is indeed a lot of untapped revenue out there. It has pointed out that though the revenue potential of KWA is estimated at Rs 145 crore, the actual revenue realisation has never crossed Rs 91 crore, which is just 64 per cent of the revenue potential.

In the absence of sufficient revenue, KWA is being forced to indulge in massive diversion of funds received for capital investment to meet revenue expenditure, the amount thus diverted being Rs 105 crore last year.

The panel feels that if financial sustainability were to be assured, KWA must develop a commercial outlook, which would imply 100-per cent billing and collection, together with a rational tariff revision and concerted efforts to contain costs.

The panel has suggested dumping of the half-yearly meter reading and billing system as the first step to achieve 100-per cent billing and revenue collection. This practice, the panel says, must make way for a bimonthly or quarterly billing and collection system. The panel concedes that this would require additional staff, but is confident that the manpower requirement can be met by redeploying a portion of the staff identified as excess by it.

Although the state irrigation minister has ruled out any immediate water tariff hike, the recommendations of the expert panel merit attention as it could form the basis for future tariff revision efforts.

The panel has pointed out that KWAs tariff structure is not sufficient to meet the operation and maintenance costs and debt servicing as envisaged in Article 23 of the Kerala Water Supply and Sewerage Act of 1986. It also says the rates prevailing in Kerala are much below those being realised by the Chennai Metro Water Supply and Sewerage Board and the Bangalore Water Supply and Sewerage Board.

The panel has suggested enhancement of the minimum tariff of domestic consumers from the present Rs 22 to Rs 32 (the rate per kilo litre rising from Rs 2-to-7.35 band to Rs 2.50-to-10 band), that for non-domestic consumers from the present Rs 102 to Rs 200 (the rate per kilo litre rising from Rs 7.35-to-10.60 band to Rs 10-to-15 band) and that for industrial consumers from the present Rs 102 to Rs 500 (the rate per kilo litre rising Rs 10.60-to-Rs 15).

The panel is also of the view that KWA should be allowed to revise tariff annually to accommodate hike in power tariff, if any, and operating costs so that the rates remain at the breakeven level.

It has also suggested introduction of sewerage charges from households and establishments in Thiruvananthapuram and Kochi corporations, which are covered by sewerage facilities. As of now, consumers avail of the sewerage facilities free of cost except for the initial connection charges.

KWA incurs an annual expenditure of Rs 6.20 crore to maintain the sewerage projects. The panel feels that introduction of a suitable tariff structure to realise the cost of service would improve KWAs revenue and help expand coverage.

On the expenditure side, the panel has suggested tough measures to reduce water loss through leakage, pilferage and faulty installations. KWA, the panel points out, does not have a realistic picture of water lost thus. However, a rough estimate points out that there is a loss of about 35 per cent of the total production.

The expert panel feels that even a 10-per cent reduction in wastage would mean a saving Rs 180 million litres daily, which, in monetary terms, would mean saving of at least Rs 23 crore annually. The advantage of minimisation of UFW (unaccounted for water) is that additional quantity of water would be available for supply without much investment as the cost of production would be zero.

The panel has also suggested establishment of special subdivisions for checking pilferage and leakage in Kozhikode, Kochi and Thiruvananthapuram. Each of these divisions should have a vigilance and anti-theft squad under an assistant engineer. The units should also be equipped with state-of-the-art equipment and trained staff.