The Central Water Authority is facing a dire financial situation as outlined in its latest annual report presented to the National Assembly.
Between 2019 and 2020, the organization’s deficits significantly rose from Rs 25,649,227 to Rs 350,379,854, representing an increase of Rs 324,730,627.
This persistent trend is mainly attributed to debts accumulated by the Central Water Authority (CWA) over the past 20 years, which are becoming increasingly challenging to repay.
The annual report indicates that the accumulated interest amounts to Rs 1.7 billion.
A source within the Ministry of Energy and Public Utilities points out that the CWA, along with another organization under its purview, jointly borrowed a total of Rs 10.6 billion since 2013.
Despite the CWA’s inability to meet its financial obligations, a sum of Rs 33.5 million was advanced to the organization during the 2022-2023 fiscal year for the implementation of nine projects.
It is also revealed that as of June 30, 2023, a provision for expected credit losses amounting to Rs 97.8 million was recorded for the total outstanding loans of the CWA.
The report also highlights that certain government decisions have exacerbated the financial difficulties of the CWA, such as the decision to exempt customers consuming less than 6 cubic meters of water per month, resulting in a revenue loss of Rs 138 million.
This measure, although seemingly favorable from a social standpoint, had disastrous implications on the financial interests of the CWA, prompting the government to subsequently grant a financial subsidy of Rs 26.1 million to the organization.
“The exemption of customers consuming less than 6 cubic meters of water per month led to a substantial revenue loss.
This measure, while appearing socially beneficial, had devastating repercussions on the financial interests of the CWA,” affirms an official within the organization.
In January 2023, the Ministry of Finance informed the National Audit Office that a committee had been established at the CWA to develop strategies aimed at increasing the authority’s revenues and reducing its costs.
This committee was tasked with reviewing proposed price adjustments in usage fees and charges regulated by the CWA.
The first meeting was scheduled to take place by the end of January 2023. However, as of December 26, 2023, no updates on the ongoing developments had been communicated.
Source: Defi Media
