NWSDB undergoes restructuring, public to pay high price for water
Sri Lanka’s water supply utility National Water Supply and Drainage Board (NWSDB) is to undergo structural reforms in its operations in line with the modern practices and market requirements.
The State-Owned Enterprise (SOE) Restructuring Board has proposed to restructure the NWSDB bringing it under a public private partnership (PPP) entity to transform it to an efficient and profit making enterprise, a senior official of the ministry of water supply said.
The formation of a holding company or Special Purpose Vehicle (SPV) to manage this loss-making SOE has been recommended.
It has also recommended to the Treasury to suspend government financial assistance to the utility and to restructure it to a profitable venture under PPP, he disclosed.
It has also proposed to repeal the NWSDB Act of Parliament and re-incorporate it under the Companies Act. This would place this enterprise under a new governance regime soon.
The Cabinet of Ministers has recently approved a proposal to revise the water and sewage charges to reflect the operational costs of the NWSDB as a prelude to a PPP venture.
Accordingly the water service charge of the monthly water bill of consumers is to be increased to Rs. 300 from Rs. 50 at present, Minister of Health and Water Supply Keheliya Rambukwella said.
The Rs. 300 charge will be levied for the usage of 15000 litres but there will be a different rate for consumers who use more than 15000 litres, he said adding that the Water Board is still charging 2 cents for one litre as the unit charge.
NWSDB experienced losses of Rs. 600 million and Rs. 1.3 billion in the years 2018 and 2019, primarily due to the drop in the Gross Profit margin and the increase in administrative cost – particularly staff cost and capital depreciation.
However, in 2020 the NWSDB returned to profitability of Rs. 450 million with improved revenue performance. But it has turned unprofitable in 2021 with a loss of Rs. 366 million, Finance Ministry data shows.
It has recorded an operational loss of Rs. 663 million for the first four months in 2022.
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