Sri Lanka Water Board makes operational profit in 2016
ECONOMYNEXT – Sri Lanka’s National Water Supply and Drainage Board (NWS&DB) improved its financial position in 2016, making an operational profit, but is still believed to be facing difficulties in servicing loans owing to inadequate revenue.
According to the Central Bank’s latest annual report, the NWS&DB made an operational profit of 1,733 million Rupees in 2016, in comparison to an operational loss of 65 million Rupees in 2015.
Total revenue of the state water utility grew by 17.5 percent to 25.1 billion Rupees in 2016 mainly due to the increased number of connections provided during the year, according to unaudited provisional accounts, the bank said.
The NWS&DB’s operational and maintenance costs increased 9.1 percent to 23.3 billion Rupees in 2016 from the year before, while capital expenditure rose 18.7 percent to 32.7 billion Rupees.
“While coverage levels and the service quality of water supply have improved significantly over the past decade, the need for water services has outstripped the government’s ability to provide sufficient water and sanitation to the public and ensure equitable access to those services throughout the country,” the report said.
To meet this need, the NWS&DB began 13 new projects in 2016, with loans from both local and foreign funding sources, aimed at providing safe drinking water to the public, it said.
Last December, minister-in-charge Rauf Hakeem said the state water utility was heading for a financial crisis, with losses understated because of its inability to service loans taken for new projects.
The NSWDB had borrowed from local banks, as well as from China, India and Korea for water supply projects.
Hakeem, Minister of Urban Development, Water Supply and Drainage, said the Water Board was unable to service the loan and was having talks with the Treasury to get financial help. The utility was not allowed to raise rates as required and a tariff hike had been put off, he said.
The Central Bank said in its annual report that the water supply and drainage sector’s improvement in 2016 was mainly because of rising demand for pipe-borne water connections.
The NWS&DB supplied 138,750 new water connections for domestic, commercial and industrial purposes, reaching 2.1 million total connections by end-2016, with the total number of water connections up 7.1 percent in 2016 over the previous year.
Accessibility to pipe-borne water through large and medium-scale water supply schemes managed by the NWS&DB also increased to 47.7 percent of the total population in 2016, from 45.9 percent in 2015.
The percentage of island-wide non-revenue water fell to 25.6 percent in 2016 from 27.3 percent in 2015, while that of non-revenue water in Colombo city decreased to 45.7 percent in 2016, the Central Bank said.
(COLOMBO, May 15, 2017)