ECONOMYNEXT – Sri Lanka will see a “definite reduction in water tariff” possibly towards end of this week after several variables in the water pricing formula including electricity cost have fallen, Water Supply Minister Jeevan Thondaman said.
Sri Lanka’s Public Utilities Commission on Monday cut electricity tariffs by an average of 22.5 percent. The move comes ahead of a presidential poll between September 17 and October 16.
President Ranil Wickremesighe is expected to contest in an independent coalition. He became unpopulour after he implemented reforms including raising utility prices to a lever without incurring any losses in line with the commitments Sri Lanka agreed with the International Monetary Fund (IMF) after an unprecedented economic crisis in 2022.
Thondaman said the water tariff will come down because electricity is one of the key component in the water pricing.
The Cabinet this week approved a water tariff formula to be implemented from 2025.
“When water tariff formula was approved, the emphasis was there only because of the fact that the formula, end of the day, needs to unburden the people. It should not be a burden on the people,” the Minister said.
“We have nine variables in the formula. My team is calculating as we speak. As far as the variables o some of the primary variables are energy, fuel, interest rates, and dollar rate. Those have already come down.”
“So I can assure you that the water tariff will be coming down. But we are looking at what the range is going to be.”
The price formula is part of reforms linked to a 100 million US dollar budget support loan from the Asian Development Bank (ADB).
The Water Board hiked rates after years of running losses, following an economic collapse which also pushed up costs.
Though the Water Board is now making operational profits, it is not making cash flow to settle loans. (Colombo/July 17/2024)