Free drinking water scheme in Telangana caught in inter-departmental wrangle

Hyderabad: Implementation of the free drinking water scheme for supply of 20 kilo litre per month by the Hyderabad Metropolitan Water Supply and Sewerage Board (HMWS&SB) is caught in an inter-departmental wrangle.

The Water Board claims it cannot clear the pending dues of about Rs 1,100 crore and bear the electricity charges for the supply of the water. Citing its weak financial condition, it has urged the electricity department not to disconnect power until a budgetary allocation for this purpose was made by the state government.

Notably, Chief Minister K. Chandrashekar Rao had intervened in the matter and previously promised suitable budgetary allocations. On this basis, the Water Board urged the power department to continue the power supply for three months by which time, it said, the issues could be sorted out with the government.

In a request to the TS Electricity Regulatory Commission (TSERC), the Water Board said it had incurred a net loss of Rs 232.33 crore for 2016-17, Rs 330.01 crore for 2017-18, Rs 299.95 crore for 2018-19, Rs 577.49 crore for 2019-20 and Rs 265.86 crore for 2020-21 up to October.

The board said the deficit was on account of operations of the board which does not include capital expenditure. “Due to the vast spread of urbanisation, it has become a challenging job to supply potable water to all citizens in and around Hyderabad. The maintenance of sewer systems has also become a challenging job for the HMWS&SB.”

The present operational area is about 1,570 sq km, which includes the GHMC area extending up to the Outer Ring Road (ORR). The supply of drinking water has become more challenging due to the concessional tariff and with an average cost recovery of Rs 10 per kilo litre against a cost of production of Rs 47.

The board proposed a concessional power tariff, which was sanctioned by the government. “This could be a great help for sustenance of our operations and also help achieve self-sufficiency over a period. Otherwise, the operations would suffer.”

It said the cost of production was increasing by the day, while the tariff has been retained for the last nine years.

The electricity department responded claiming that it too was in a sad condition. There was no revision of tariff since 2017-18. If the orders dated July 18, 2020 of the regulatory commission were to be implemented with effect from 2018-19, distribution companies (discoms) were bound to incur a revenue loss of Rs 244.57 crore, for fiscal 2018-19, Rs 257.38 crore for fiscal 2019-20, Rs 63.59 crore for the first quarter of fiscal 2020-21. Further the discoms would be losing Rs 21.19 crore per month till the revised tariff orders are approved. This loss was due to lack of tariff revision and fall in revenue.

Hence, the total impact on revenue for discoms is Rs 538.95 crore up to June 2020, including Rs 83.35 crore towards surcharge.

It said the commission has given its nod to supply power to all water supply pumping stations of HMWS&SB at a tariff linked to energy charges at Rs 3.95 per unit as decided by the government in August 3, 2018, and as per the directions given to the commission in the letter dated June 26, 2020, from fiscal 2018-19.

It would continue to do so till a final view is taken by the commission on determination of tariff for retail supply for fiscals 2019- 20 and 2020-21 and also in a true up of retail supply tariff for fiscal 2018-19.

A senior Water Board official told Deccan Chronicle that the issue has been taken to the notice of the Chief Minister. The CM has asked the Water Board to make part payment immediately and assured that he would make suitable budgetary allocation for the present fiscal.

He also advised the electricity department not to disconnect power supply to HMWS&SB for the next three months until the budgetary allocation is made. The CM said the free drinking water supply scheme would continue as the government has given such an assurance to the people.