The Hindu : Tamil Nadu News : Water supply goes up, finances come down

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Thursday, Mar 08, 2007
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Tamil Nadu

Tamil Nadu

Water supply goes up, finances come down

T. Ramakrishnan

Metrowater registers shortfall of Rs. 12.54 cr.

CHENNAI: The city's water supply position has improved in recent times, but not Chennai Metrowater's financial health.

For the first time since 1992-93, Metrowater recorded a deficit during 2005-2006. Last year, the agency registered a shortfall of Rs. 12.54 crore, the difference between the total income and the total revenue expenditure. For the current year coming to a close at the end of this month too, the position does not seem rosy, as the deficit is only expected to go up, says an official.

The main reason cited for to the shortfall was the increase in the operating expenses. In 2004-2005, the expenses were Rs. 30.6 crore, whereas they rose to Rs. 52 crore in 2005-2006. As the quantity of water treated and supplied went up, the power bill, a major component of the operating cost, also increased. In October 2004, the supply was delivered on alternate days. In November 2005, the daily supply was restored. The quantity was 400 million litres a day (MLD). Now, it is 650 MLD. The official contends that there is no cash loss. If depreciation, only a book adjustment, is not taken into account, there is nothing much to worry.

At the same time, the official admits that Metrowater can't remain complacent as the deficit goes up. The corrective course, he says, is to increase water charges. The previous upward revision in water tariff for domestic consumers was effected in October 1998. Four years ago, the tariff for industry was increased. The prescription of the World Bank, which funded several Metrowater projects, is to go in for incremental increase every year. Hinting at the need for an upward revision, the official says at the present level of the tariff for water supply and sewage disposal, the expenditure incurred for every connection comes to Rs. 1.67 a day. In many congested areas, several families use the services just from one connection. When people spend generously on entertainment, they would not find it difficult to pay a little more for the essential services.

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