WB recommends water tariff hike
The World Bank (WB) has recommended the raising of water tariffs, in order to meet costs needed for expansion and maintenance, despite Sri Lanka’s water tariffs being high compared with the South Asian average, a study released by the WB last month (September) showed.
Whereas the South Asian average water tariff is US$ 0.17 per unit of water, in Colombo it was five US cents (Rs 7.56)* more, at $ 0.22 per unit. However, in Sub-Saharan Africa, water tariffs were nearly four times more than that at Colombo, at $ 0.78 per unit, the report showed.
The WB further said, that water tariffs in Sri Lanka are subsidized.
“If capital investment cost, operation and maintenance cost, replacement cost, environmental cost and opportunity cost are all included, only about one-third of the total cost of water supply is recovered from consumers according to some estimates,” it said.
Although water tariffs were increased in 2009 and again in 2012, they are still too low for cost recovery beyond operation and maintenance costs, the Bank said.