The NWS&DB made an operational profit of 192 million rupees in 2009 with total revenue up by 36 percent, owing largely to the tariff hike, while operational and maintenance cost increased by 10.4 percent, it said.
The bank, in its annual report, drew attention to the high water losses suffered by the Water Board.
"The operations of the NWS&DB are hindered by a high level of unaccounted water losses due to various reasons."
Unaccounted water remains at around 36 percent in and around the capital, known as the Greater Colombo area, and 25 percent in regions.
"High incidence of leakages as a result of a decayed distribution network, illegal connections and shortcomings in meter readings are the major reasons for unaccounted water," the Central Bank said.
The cost of purification of water has increased over the years due to pollution of water sources by industrial effluents and other human activities such as improper waste water disposal, solid waste dumps and use of agro-chemicals."Hence, strong actions need to be taken to reduce the unaccounted water to an acceptable level and efforts would also be needed to reduce the level of water pollution," the bank said.
Demand for pipe borne water is growing continuously with the increased level of urbanisation, change in lifestyles and expansion of commercial and industrial activities.
The NWS&DB provided 80,060 new connections during the year resulting in a total of 1.3 million connections including industrial and commercial establishments.
The proportion of Sri Lankan households with access to safe drinking water sources was 84.8 percent, relatively high compared to other developing countries.
However, only about 35.5 percent of households and commercial establishments have access to pipe borne water, the report said.
Several major water supply projects were being built in 2009 to improve the capacity and distribution network in Colombo as well as other important towns.