The National Audit Office has revealed that the National Water Supply and Drainage Board (NWSDB) has failed to establish a policy for the timely revision of water tariffs despite operating for more than 49 years.
According to a recent audit report, water tariffs have been revised on 17 occasions since 1990 without a formal tariff policy being introduced.
The report stated that tariff revisions carried out in 2022 and 2023 had placed significant pressure on consumers affected by the country’s economic crisis, with water charges increased by 70% to 100% compared to the rates applicable in 2012.
The NWSDB had identified factors including increased bank interest rates, electricity costs, fuel prices, raw material costs and depreciation of the rupee as reasons for the tariff increases.
However, the audit also highlighted several management-related issues that contributed to financial difficulties, including increased manpower costs, delays in completing projects, loss of expected revenue, several non-revenue water projects and delays in implementing projects aimed at reducing energy costs.
The report further noted that several projects implemented with foreign loan assistance had failed to achieve expected targets due to delays in completion.
The audit found that 106 sub-projects under the NWSDB’s “Water for All” programme had recorded limited progress, resulting in the Board failing to provide the expected 1,316,542 water connections by 2024.
It added that this had affected consumers and resulted in the loss of potential revenue for the Board.
The report also revealed that household consumers using 6–10 units, 11–15 units and 21–25 units had faced water bill increases of 310%, 319% and 218% respectively following tariff revisions introduced in 2022 and 2023.
The audit further pointed out that employee costs accounted for around 36% of the Board’s operational expenditure, directly affecting water tariffs.
Despite operating at a loss between 2019 and 2023 and delays in completing several projects, the NWSDB had paid annual bonuses and incentives to employees, with Rs. 894 million spent for such payments in 2023, according to the report.
The audit also found that while the number of employees had declined by 1,254, or 12.89%, between 2019 and 2023, the cost incurred per employee had increased by 26.67%.
