ECONOMYNEXT – Sri Lanka cabinet’s decision this week to raise the tariff on water supply will unlock a $200 million funding from the Asian Development Bank (ADB) to be used by the government as the budget support, Minister of Water Supply and Estate Infrastructure said.
The cabinet on Monday approved a proposal to raise the water tariff and the move is expected to address a monthly loss of 2.8 billion rupees that has to be paid for interest payment for bank loans and 425 million rupees for already increased electricity prices.
“We have an ADB reform and through this ADB reform we could unlock $200 million dollars in a policy-based loan where they would be able to give it to the government as budgetary support And this would benefit the people,” Thondaman told a media briefing on Tuesday (18).
Revising the utility and fuel prices in line with market-based prices is one of the key conditions Sri Lanka will have to fulfill to continue the disbursement of $3 billion IMF loan.
President Ranil Wickremesinghe’s government raised prices of electricity, cooking gas, and fuel sharply last year in line with the market prices. The fuel and cooking gas prices have been already reduced due to falling global prices and rupee depreciation.
Water tariff was increased last year, but the Minister said it was not sufficient to meet the increased cost from the expensive electricity.
The cabinet this week approved the water tariff hike citing the financial viability and sustainability of the National Water Supply and Drainage Board should be confirmed in order to achieve the objectives of expanding access to safe water and sanitation and thus to improve the quality of service and sustainable use of water resources. (Colombo/July 19/2023)