• Tariff hikes cannot be attributed to management weaknesses alone
• Electricity, wages, exchange rates and project costs also pushed up charges
• Water production costs vary significantly between districts 

The National Water Supply and Drainage Board (NWSDB) has acknowledged that management inefficiencies contributed to higher water tariffs, while stressing that the increases cannot be attributed to weaknesses within the Board alone.Speaking to The Daily Morning yesterday (16), NWSDB Chairman Chandara Bandara said the Board accepted that management inefficiencies had contributed to recent tariff increases, but stressed that several other factors had also driven up charges.

“It is only after considering all the factors regarding water production across the country that we decide the water tariff. These include the electricity cost, the wages of the workers, the investments made on development projects, and the operation and maintenance costs. Each of these expenses I mentioned has been affected by the period after 2019, the Easter Sunday terror attack, and the 2021 economic crisis. The increase in the dollar rate has also impacted the tariff,” he said.

Bandara acknowledged that inefficiencies within the Board, including worker inefficiencies, project delays, the failure to complete projects within estimated timeframes and the losses arising from such delays, were also reflected in water tariffs.“Hence, there is truth in the report saying that the inefficiencies of the management of the Board added to the water tariffs, but the tariff contained all these factors together. So, we cannot justify that this is the only reason,” he added.

The National Audit Office (NAO) report had also recommended that the NWSDB adopt a fairer basis for calculating water bills instead of disproportionately increasing charges for selected categories of consumers. It had further called for measures to reduce non-revenue water.However, Bandara said the cost of producing water differed significantly from one area to another.“Take Jaffna as an example. There, water is produced by pumping salt water and purifying it, resulting in a production cost of Rs. 150-160 per litre. At the Ambathale water treatment plant, the cost is around Rs. 20-24 per litre, while production at Labugama and Kalatuwawa costs around Rs. 12 per litre,” he said.

He explained that water was also distributed using generators in some areas where electricity was not available, adding that production and distribution costs therefore varied between districts.According to Bandara, the purification method, energy cost, distribution cost and the condition of the water at the source all affected the production cost in different areas.He also explained the reasons behind delays in several projects and the management difficulties faced by the NWSDB.

“Due to Covid-19 pandemic, some of the projects were delayed for a year without being able to work with the contractors. In 2022, the wages of the contractors were delayed for around two years, as foreign funds for these projects were halted. For instance, loans from the Asian Development Bank (ADB) and the World Bank were halted,” he said.He added that some projects were funded through domestic bank loans from several banks, but these loans were also completely halted during those years.

“There were also some contractors who halted the projects as, after starting the projects after a period of time, they couldn’t manage to finalize the project with the estimated cost,” he said.The Chairperson’s comments and clarifications follow a special audit report on the water tariff revision implemented by the NWSDB between September 2022 and August 2024.

The report found that weaknesses in the Board’s management had contributed to increased costs and revenue losses, and said management should urgently address the issues, reduce operational inefficiencies and ensure greater benefits for consumers.