Water Board incurs heavy losses due to Non Revenue Water

A recent study revealed that the National Water Supply and Drainage Board (NWSDB) has suffered heavy losses as a result of Non Revenue Water (NRW).

NRW is referred to as the difference between the amount of water input to the distribution system and the amount of water billed to consumers. High levels of NRW reflect huge volumes of water being lost through leaks, not invoiced to customers, or both.

This seriously affects the financial viability of water utilities through lost revenues and increased operational costs, the report noted.

In 2008 the total revenue loss incurred by NWSDB due to NRW was Rs.4.7 billion while in 2009 the figure stood at Rs.4.9 billion.

In the Western Province alone, the Revenue loss incurred due to NRW in 2009 amounted to Rs.3.6 billion while in 2008 it was about Rs.3.7 billion.

The NRW tabulated for the year 2009 for the entire island was 31.1 percent while in 2008 it stood at 32.1 percent.

However, the study did not reveal figures of 2010 and 2011. But those who are aware of the study and the NWSDB say the situation with regard to NRW remains unchanged. The study pointed out that the NWSDB is yet to overcome the challenge of NRW, and it noted lack of understanding about the magnitude and the cost involved in the process as main reasons for insufficient NRW reduction efforts.

“However, understanding the problem alone will not resolve the issue, but effective implementation and monitoring of solutions will be the key success factors for NWSDB” the study said.

Accordingly, it stressed the importance of preventive maintenance on a periodic basis, in order to reduce NRW and Unaccounted For Water (UFW) components. Nevertheless, due to financial and operational constraints, preventive maintenance has not been carried out in critical NWSDB regions.

Moving forward with preventive maintenance can be a key success factor for NWSDB’S sustainability, the study further stated.

Meanwhile the NWSDB recorded a net loss of Rs.1.4 billion for the year ended 2009 in contrast to a net loss of Rs.2.9 billion in 2008. This indicated a percentage change of 51.4% on the Board’s financials. Other operating expenses were Rs.1 billion for the year under review, while it was Rs.468 million during the previous year. This in turn was an increase of 133%. An analysis of the Balance Sheet revealed that the net assets position of the NWSDB has been improving during the period though it was evident that the income statements maintained losses in the year in concern. The net asset position has grown mainly due to capital-work-inprogress carried out using capital grants, loans and infusion of funds by the government. The NWSDB is the main provider of safe drinking water through pipe water supplies and sanitation and sewerage services. The National Water Supply & Drainage Board had its beginning as a sub department under the Public Works Department. It functioned as a division under various ministries since 1965 and was converted to a Statutory Board by an Act of Parliament in 1975. The NWSDB functions under the Ministry of Water Supply & Drainage. This Ministry was established in 2007 separately for the subject area of water supply & drainage. Furthermore, the National Water Supply & Drainage Board is the only organization coming under the purview of this Ministry.

Around 80% of the population has access to safe drinking water of which 30% rely on piped water supply systems of the National Water Supply & Drainage Board.