Chennai Metrowater has recorded a net deficit for the fifth consecutive year by registering Rs. 99.5 crore loss in 2009-2010.

The water agency started making losses since 2005-2006, the final year of the previous All India Anna Dravida Munnetra Kazhagam regime. The last occasion when the agency's income exceeded expenditure was in 2004-2005. Then, Metrowater had showed a surplus of Rs.5.18 crore.

During the previous financial year, the water agency also wiped out accumulated surplus and slipped into the deficit zone in this respect too.

The annual report of Chennai Metropolitian Water Supply and Sewerage Board (CMWSSB), which was placed in the Assembly on Wednesday, stated that “the Board is providing effective and efficient services and continues to strive to achieve its goals and objectives though the total revenue income is lesser than the total expenditure.”

The income of Metrowater has gone up only incrementally over the years though the expenditure is on the steep rise.

Salaries and wages

One of the reasons for the sharp increase in expenditure is the growing burden of salaries and wages. In 2005-2006, when Metrowater had 4,578 employees, the water agency had spent Rs. 60.94 crore towards salaries and wages. Five years later, even with 4,333 employees, the expenditure on this count went up to Rs. 127.91 crore. This was, in turn, attributed to the upward revision of salaries of employees.

Another reason cited for the growing revenue gap is non-revision in the tariff structure.

For domestic consumers, the tariff was last revised in October 1998 and for commercial establishments, in January 2003.

Number of projects

Despite the widening gap, Metrowater has been taking up a number of projects to improve water supply and sewerage.

The government had sanctioned 28 projects in Chennai and select local bodies falling under the Chennai Metropolitan Area with an “unprecedented outlay” of Rs. 2,032 crore under the Jawaharlal Nehru National Urban Renewal Mission, the annual report stated. Under the Tamil Nadu Urban Development Project-III, the government sanctioned six projects in the municipalities of Kathivakkam, Ambattur, Thiruvottiyur, Pallavaram and Madhavaram. The cost of the projects was around Rs. 250 crore.

Another plant

In addition to the establishment of a 100-million litres a day(MLD) sea water desalination plant in Minjur on design, build, own, operate and transfer (DBOOT) basis, another such plant is coming up in Nemmeli on East Coast Road.

In July last year, Chief Minister M. Karunanidhi inaugurated the Minjur plant.

The Nemmeli plant, which is being set up with the Union government's grant of around Rs.870 crore, is estimated to cost about Rs. 1,033 crore totally.

Work on this plant is scheduled to be completed by December.