Sri Lanka water utility still cannot cover costs

June 15, 2009 (LBO) – Sri Lanka’s national water supply and drainage board (NWS&DB) has given 34 percent of the population pipe-borne water, but it still cannot recover costs, a finance ministry report said.

The percentage of population covered by the Water Board’s pipe-borne schemes increased to 34 percent in 2008 from 32 percent in 2007.

The number of new connections provided under major schemes increased to 108,049 in 2008 from 90,000 in 2007.

In Sri Lanka a powerful lobby – largely made up of populist politicians – oppose increasing utility charges, limiting such facilities to a relatively well to do section of the population in a bid to win votes.

This weakens the financial health of the entity and makes it difficult to expand to serve the rest of the population.

Treasury subsidies also spread the cost of serving the people who enjoy such services across the population, burdening even those who do not enjoy the utility, in a peculiarly perverted form of third world social justice.

Until telecom prices were raised and the sector privatized, only those with political connections of government ‘priority’ needs could get a connection.

Even businesses found it hard t