Sri Lanka issues Rs113bn in guarantees to water agency

ECONOMYNEXT – Sri Lanka has issued 113.3 billion rupees of Treasury guarantees for borrowings by the National Water Supply and Drainage Board (NWSDB) and another 34.1 billion rupees remains to be guaranteed, the finance ministry said.

The NSWDB and the Road Development Authority were two agencies that were borrowing on their own balance sheets.

Such direct borrowings have undermined fiscal transparency by understating state spending and deficits, analysts have warned.

Unlike agencies like the Road Development Authority, which has no revenue on its own, the Water Board has its own revenues, although output is sold below cost.

Up to August 2017, the Water Board had reported pre-tax profits of 886 million rupees, up from 302 million rupees a year earlier. A net profit number was not available.

A tariff hike in water has been delayed. (Colombo/Nov19/2017)

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