CAG raises doubts on water board’s sustainability

Non-collection of dues blamed

March 26, 2021 11:19 pm | Updated 11:19 pm IST - HYDERABAD

The Comptroller and Auditor General’s report for the year ending March, 2018 presented in the State Legislature on Friday raised serious doubts about the financial sustainability of the Hyderabad Metropolitan Water Supply & Sewerage Board.

The report attributed the precarious financial position of the Board to the increasing burden of non-collection of dues, non-revision of tariff in the domestic category, and water cess waiver previously offered by the Board, besides lack of discretion in water supply management.

The Board had continuously incurred expenditure in excess of income during the period 2013-17, due to which accumulated losses stood at nearly ₹967 crore as on March, 2017.

The Board had to resort to loans of ₹300 crore in 2014, by mortgaging its buildings including headquarters to pay its power dues, which compromised the maintenance of its transmission and distribution pipelines.

Waiver of water cess dues to the extent of ₹441.46 crore in 2016 had its adverse impact on the revenues.

Water cess dues had increased from ₹861 crore in March, 2013 to ₹1210 crore in March, 2018, and to ₹1,351 crore by July in 2018.

GHMC defaulting in payment of 15% share of Water Tax subsumed into the Property Tax to the water board, as mandated by the government, had a severe impact on the Board’s revenues. As on March, 2017, dues from GHMC to the water board accumulated to ₹762 crore.

Dues on deposit contribution works from other agencies including GHMC added ₹64.55 crore more to the losses.

Discontinuation of drawing of drinking water through gravity from Himayatsagar reservoir and Singur Phase-IV, and very minimal quantity drawn from Osman Sagar reservoir during the audit period, have increased the burden of power bills phenomenally.

The Board had to rely on water pumped from Godavari river instead, thus incurring avoidable pumping charges of ₹141 crore per annum.

Further, the Board’s precarious financial position caused delay in payment of electricity bills, which resulted in late payment charges of ₹139 crore.

The report indicted water board for faulty planning of storage reservoirs, wherein the consultant agency had under-reported the existing capacities, and inflated the required capacities. Against the required storage capacity of 202 million gallons, the Board had planned for 217 million gallons.

The report found fault with the management of the drinking water supply projects, wherein the Board has paid in excess for the contractor for the execution of intake channel from the foreshore of Yellampally barrage.

Despite the higher invert level allowed by the Irrigation department which reduced the excavation work, no deductions were made in amount payable to the contractor.

In another instance, the contractor was given undue double benefit due to addition of Value Added Tax component twice, the report said.

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