Wasa proposes minimum 20% hike in water tariffs

With the issue of poor quality tap water in the capital city unresolved for years, the Water Supply and Sewerage Authority (Wasa) has now proposed a 20% hike in water tariff – although it is allowed to raise the tariff by only 5% a year.

"We have proposed hiking water prices by a minimum of 20% to reduce subsidies. Wasa will not have any objection if the government wants to increase the prices even more," Taqsem A Khan, managing director of Wasa, told journalists at his office on Wednesday.

"According to the law, Wasa can raise water tariffs by 5% every year to adjust with inflation. But, we do not think a 5% hike will be enough this time. This is why we have sent our proposals to the ministry," he added.

Noting that there is a directive from the high-ups in the government to gradually reduce the amount of subsidy on water prices, he said, "There is a big gap between the cost of production and the selling price of water. Presently, our production cost is Tk25 but we supply water to customers at Tk15.18."

The government has to pay a subsidy of Tk10 per 1,000 litres of water, he mentioned, adding no organisation can run autonomously if they rely on subsidies from the government.

At present, the price of each unit (1,000 litres) of water for residential use is Tk15.18, says Wasa in its proposal, adding if the price is hiked by 20% it will stand at Tk18.25.

For commercial connections, the current price per unit of water is Tk42, which will go up to Tk50.4 after the proposed 20% hike.

Dhaka Wasa wants to make the new water price effective from 1 July this year. The price hike was proposed at the Wasa board meeting on Monday.

Even amid the Covid-19 epidemic, Dhaka Wasa increased the prices of water at residential and commercial levels in the last two years.

Water prices have increased 14 times in the past 13 years.

"As prices of commodities are rising and the livelihoods of marginalised people are becoming more expensive and difficult because of the coronavirus, increasing water prices every year is a cruelty to them. This is totally unacceptable," urban planner Adil Mohammed Khan told The Business Standard.

"Access to water is a fundamental right of people. The state is not supposed to trade with the citizens over this. It is the responsibility of the state to make it easily accessible to all," he added.

Even if inflation is taken into account, the range of price hike should be limited between 5% and 6%, he observed, adding the reason for this price increase is that Wasa takes up water- and infrastructure-related projects that are very cost-incentive, but returns are much less compared to their costs.

"In order to minimise the costs of these projects, they burden the citizens with increased prices," he continued.

The urban planner recommended that Wasa projects be reviewed and necessary measures be taken to make sure their costs do not increase in the future.

Speaking on the quality of water, he said, "A recent research by Wasa itself has found that people do not drink water directly. They have to boil it before drinking, which consumes a lot of gas."

The Dhaka Wasa managing director, however, made various arguments in favour of increasing the prices. He termed the whole issue as "adjustment of the market price with the production cost".

In the period between 2009 and 2021, Dhaka Wasa increased water tariffs for residential use by 181% from Tk5.75 a unit in 2009 to Tk15.18 in 2021.

On 24 May last year, Dhaka Wasa increased water tariffs by 5%, without addressing the water crisis in different places in the city at a time when a lingering Covid pandemic affected the people's income. The increased water tariff came into effect on 1 July last.

Before this, in February of 2020, Wasa had increased water prices for residential and commercial users. The price of per unit was raised to Tk14.46 from Tk11.57 for residential users and Tk40 from Tk37.04 for commercial users. The tariffs came to effect on 1 April that year.

Rajshahi Wasa also increased water tariffs recently – from Tk2.27 to Tk6.81 per unit for domestic consumers and from Tk4.54 to Tk13.66 per unit for commercial consumers.