The Water Supply Ministry has taken steps to amend the National Water Supply and Drainage Board Act Number 2 of 1974 while introducing contractor financing methods and having provisions to include the private sector for projects. The new draft bill with the amendments has already been prepared and approval will be obtained from the board [...]

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Water board plans to allow private sector to provide tap water; Trade unions say Waterloo

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The Water Supply Ministry has taken steps to amend the National Water Supply and Drainage Board Act Number 2 of 1974 while introducing contractor financing methods and having provisions to include the private sector for projects.

The new draft bill with the amendments has already been prepared and approval will be obtained from the board of directors within a month and it will be sent to the Department of Legal Draftsmen, NWSDB Additional General Manager Wasantha Ilangasinghe said. Later it will be sent for Cabinet approval, he added.

She said NWSDB hoped to increase water connections in the country up to 80% by 2025 through these amendments but funds amounting Rs. 1000 billion would be required. At present tap water connections cover only 45% of the country.

NWSDB trade unions have strongly opposed the move and said the board would be deprived of the monopoly it had regarding water purification and water distribution by establishing subsidiaries and being opened to the private sector.

National Water Supply Employees Union Secretary Upali Ratnayake said the fundamental rights the people of the country had to obtain drinking water at an affordable cost would be taken away and high prices would have to be paid.

Mr Ratnayake, an engineer, said by establishing companies affiliated to government institutions, like the Ceylon Petroleum Corporation (CPC) had done,was a serious offence and would often make state institutions bankrupt.

Responding to allegations Minister Vasudeva Nanayakkara said:

“The Water Board will not engage in doing something similar to what the CPC did. The Water Board will be able to competitively intervene in certain tasks being carried out by the private sector. Similarly young people could be provided with training and job opportunities created. We hope to set up a subsidiary. However, we will not enter into water purchasing agreements with the private sector.”

The Treasury had advised that the “contractor financing method” should be included in the new act. This would enable parties obtaining tenders to find funding facilities for projects and Mr. Ratnayake said it would pave the way for serious financial irregularities.

Since no one was coming forward to provide loans due to the economic crisis prevailing in the country, he said parties who acquired tenders would have to obtain loans through brokers at high interest rates. Then exorbitant commissions would have to be paid to brokers and this would clearly open up opportunities for deals, he said.

“Under the prevailing system, donor agencies such as the Japanese International Cooperation Agency (JICA), Asian Development Bank (ADB) and the United States Agency for International Development (USAID) provide funding for water projects. They gave low interest soft loans. Paying back the loans begins once the project is completed and it brings in an income. An extensive grace period has been granted to pay back those loans. However, the method of contractor financing would lead to political and business deals,” Mr. Ratnayake said.

Minister Nanayakkara said the “contractor financing method” had been introduced through the proposed new bill due to the difficulty of obtaining loans by the board but the tenderer should get loans under the conditions of the board and approval from the External Resources Department (ERD) would have to be obtained.

Similarly, the new act included a number of amendments such as taking legal action regarding water pollution in catchment areas, using illegal water connections and increasing fines.

The Minister said Water Act No. 2 of 1974 was amended only once in 1992 and it hax become essential that the act be revised to meet new requirements.

Dr. Ilangasinghe said to carry out the new amendments with Cabinet approval, a committee had been appointed comprising officials from a number of government institutions and it had been opened to public views through newspaper advertisements.

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