Another water tariff increase in the offing

Water Services Association of Malawi (Wasama) says consumers should brace for another water tariff hike within the financial year as the country’s five water boards move to meet operational costs.

Speaking on the sidelines of the signing of Service Charter Commitment between Wasama and Consumers Association of Malawi (Cama) in Blantyre yesterday, Wasama president Robert Hanjahanja said despite getting a 52 percent average water tariff hike, some water boards are yet to meet their operational costs, a situation he said follows a staggered water tariff hike.

He said: “Some water boards have been given full tariff adjustments while others are at a certain percentage. Some will be able to operate at cost while for others, they are still below cost.

“We have just been given a step tariff adjustment and there will be other steps between now and the end of the financial year.”

Hanjahanja, who is also Blantyre Water Board (BWB) chief executive officer, said the recent tariff hike will help the boards to operate better and more efficiently.

“There will be significant improvement in service and water quality will be maintained. We will be able to respond quicker to faults,” he said.

Chipping in, Cama executive director John Kapito said while the tariff hikes are small compared to operational costs, consumers expect improved service delivery and efficiency.

He said having an independent body to review water tariffs would be ideal as water boards will be allowed price hikes based on key performance indicators.

“What we have done today is to demonstrate that this is not a gift by making sure that water boards are committed through the service charter,” said Kapito

The financial performance of the country’s water boards has been deteriorating for the past years due to various factors.

Treasury figures show that BWB’s financial performance has been worsening largely due to non-implementation of the cost-reflective tariffs, which had not been adjusted in the last three years, high non-revenue water (NRW)due to dilapidated pipeline systems as well as high electricity costs.

As at mid-year of 2020/21 financial year, BWB registered a net loss of K4.2 billion.

As at December 31 2020, Southern Region Water Board’s financial position worsened with a loss of K391.5 million due to reduced volumes of water produced as a result of drying of water sources which negatively affected the capacity of the board to supply water to customers.

Central Region Water Board financial performance also worsened. As at December 31 2020, figures show that the utility recorded a net loss of K502.6 million due to high NRW, which was at 31 percent due to the frequent pipe bursts, presence of a high number of stuck and aged meters and leakages of old tanks, among others.

The financial performance of Northern Region Water Board also deteriorated as at June 2020, with a loss of K3.8 billion down from a profit of K323.9 million in the 2018/19 financial year largely hampered by the economic slowdown as a result of Covid-19

Treasury also expects LWB to register an 82 percent reduction in profitability to K400 million due to losses as a result of high NRW level.

Wasama is a grouping of the country’s five water boards.