Tariff hike to make good DJB's costs

The Delhi Jal Board is hopeful that the additional revenue generated after the water tariff hike in December 2004 would enable it to meet its operational costs during the current financial year.

The state government agency's annual revenue was only Rs 300 crore before the tariff hike, while the cost of operations were to the tune of Rs 500 crore.

DJB's Additional Chief Executive Officer-cum-Director Finance Ashish Kundra said, "We expect the annual revenue to touch Rs 500 crore after the tariff hike. We would then talk to the state government for bearing the capital expenditure cost only."

The water supply utility's capital expenditure last year was Rs 650 crore, while it would be around Rs 700 crore during the current financial year, according to Kundra. He said the entity had already submitted its financial restructuring plan with the Delhi government.

The DJB, which meets the water demands of the 15 million population with 1.5 million connections and a pipeline network of close to 10,000 kilometres, is facing a financial crunch with accumulated losses mounting to over Rs 6,000 crore, owing to a high percentage of non-revenue water (water for which DJB is not paid) and a very less percentage of functional meters.

"The non-revenue water at present is around 50-55 per cent of the total supply, of which 40 per cent is due to leakages," said Kundra, adding, "Only 35-40 per cent of the installed meters are operational."

Lower tariffs and an even lower rate of collection are some of the factors adding to the wooes of the utility. "We are not a private sector company so it is not possible for us to raise tariff rates from time to time," said Kundra, discounting any further hike in tariff.

In order to cut down in its operational cost, the utility has already chalked out a plan to reduce the share of non-revenue water and to indulge in aggressive metering.

"Our intention is to bring the non-revenue water to 35 per cent in six years. We will also take all steps to achieve the target of over 90 per cent metering," Kundra said.

A huge staff strength at 26,000 is also a headache for the water supply utility, though Kundra said no voluntary retirement or compulsory retirement scheme was on the cards.