National Electric Power Regulatory Authority (Nepra) will re-determine the electricity tariff structure for all water supplying schemes across the country if it considers the demand of Karachi Water and Sewerage Board (KWSB) for 50 percent reduction in power tariff.
Though KWSB has demanded a separate tariff structure for it while reducing the existing tariff of Karachi Electric Supply Company (KESC), Nepra has made it clear that any change or amendment in tariff would be unanimous for all water supply schemes in the country.
This was said by one of the Nepra officials who attended the public hearing organised by the authority to discuss a petition filed by KWSB for demanding reduction in tariff. The hearing was also attended by a large number of people including interveners, representatives of Khyber Pakhtunkhwa and Sindh Government and Karachi Chamber of Commerce and Industry and various organisations.
Earlier Farogh Naseem, Senator of Muttahida Qaumi Movement, while representing KWSB, briefed the petition filed by water board. He said that electricity was being consumed in three stages while pumping water from Dhabeji to the city making a huge burden of tariff over the board.
According to him, due to the peculiar location and topography of Karachi ie being at a distance of 160km from River Indus (KB-Feeder at Jamshoro) and Hub, the Petitioner has to establish various pumping stations in order to ensure the provision of the basic necessity of life ie water to the residents. The large numbers of pumping stations cause heavy electric bill and the consequential charges.
The excessive charge of electricity by KESC is a major hit on the cash flows of the board, due to which KWSB is unable to carry out various development projects, rather expenditure on operations and maintenance had to be curtailed, due to which machines and the overall system is becoming obsolete and redundant which may collapse the whole system as water problems already are increasing day by day, which sometimes turn into civil unrest.
From the perusal of the bill being raised by the respondent, it will be noted that it comprised fixed charges, variable charges, fuel surcharge adjustment, electricity duty and general sales tax. It is to be noted that the said bill is issued to the Petitioner treating it as a commercial organisation while the Petitioner is classified as Strategic Organisation.
There are a total number of 276 meters installed by the respondent at various stations of the Petitioner. Maximum number of meters ie 213 in numbers is under commercial and industrial categories. The heavy electricity bill on commercial basis being raised by KESC cannot be passed on by the Petitioner to its customers, as it will result in manifold increase in the water charges.
It is submitted here that Petitioner is not at liberty to determine the water tariffs without approval of the government. According to him Government of Sindh has prescribed the water charges and also considering the fact that the Petitioner is a non-profit organisation, therefore it is not possible for the Board to raise the water charges considering the real per-capita income of the majority of the population, as otherwise it may result in economic and social chaos including riots, which may result in far more economic loss to Pakistan as compared to the financial gain to the Respondent by charging industrial/commercial rates due to the reasons described above.
Water charges could not been increased in the ratio as compared to the electricity rates due to socio-economic factors, but the electricity charges have increased manifold during this period, which is a major cost component for the Petitioner as well as creating financial gap in the revenue and expenditure affecting the operations of the Petitioner as well as the projects to ensure proper water supply for the citizens of Karachi.
Responding to the petitioner, KESC representatives said that the financial constrains led by the operational costs and other expenditures have nothing to do with the demand of KWSB for a separate structure of tariff for itself only. The whole demand made through the petition has no rationality for demanding 50 percent cut in KESC's tariff which is determined by Nepra.
The water board rather should go to federal and provincial government for help or increase the water charges to bridge the gap between revenue and expenditures. Talking about the Strategic Consumers, KESC said specific consumers, to be treated as strategic, were already mentioned in the Implementation Agreement, the company signed with the government.
KWSB, which consumed around 80 megawatts of KESC, was defaulting over Rs 17.5 billion to the power company currently and despite the non-payment of dues the Board was trying to further burden the privately run public utility, they added. In reply to a query, they said the subsidies received from the government were already being passed on to the end consumers equally.
On the other hand, supporting the petition of KWSB, a representative of Khyber Pakhtunkhwa Government said as the water supply schemes were heavily subsidised by governments in other parts of the world, his government would welcome if a tariff structure was framed for the sector which was defaulting huge dues to various DISCOs in the country.
He also raised questions that whether the water supply schemes should be dealt as industrial or commercial consumers in the country as according to legal definitions of the said consumers the water supplying schemes do not fall in these categories. Arif Bilwani, an intervener, said that KWSB had not provided basic information needed to clear its financial position and working procedures.
Ashraf, a representative of Cantonment Boards of the city, said the six cantonments would fully support the petition filed by KWSB as they were also not meeting the revenue demands against expenditures in terms of water supply. Qazi Ahmed Kamal, another intervener of the petition, said Nepra and other concerned authorities should find a solution to the problem as interests of millions of consumers are attached with both utility organisations. He said four-hour of load shedding to water pumping stations mean eight-hour long dysfunctionality of KWSB installations creating immense problems to the consumers who are already uncertain about supply of water. According to the representative of Sindh Government, who also supported the petition, government lifts water more than it supplies.
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