KARACHI, Aug 17: City Nazim Niamatullah Khan has sought explanation from the KWSB about changing water tariff in 2001 which has resulted in a loss of more than one billion rupees to the utility organization.

The city nazim wants to know that on whose orders the KWSB had effected the changes by de-linking the tariff structure from the Net Annual Rental Value (NARV). Attributing the heavy loss to the 'irrational and illogical' water tariff offered to commercial concerns, well-placed sources told Dawn that although a flat rate of Rs25 per month was fixed for shops only, the concerned KWSB officials offered the same rates to major commercial concerns, such as five-star hotels, factories, major food outlets, etc.

Quoting an instance, they said a five-star hotel was now paying Rs400,000 annually as against Rs4 million it had been paying prior to the introduction of new water tariff in 2001. The KWSB thus suffered an annual loss of Rs 3.6 million on account of just one commercial consumer.

The most surprising aspect of the fact is that responding to the explanation called by city nazim, who is also chairman of the KWSB, that on whose order or recommendation the water tariff was changed in 2001, all the concerned senior officials said that they had neither recommended nor prepared the revised tariff structure in print. They also failed to produce the original file of the revised tariff.

Annoyed over the situation, the nazim sent a note to the KWSB managing director on July 31, 2004, stating: "This is a serious matter. The officers concerned should be identified and explanation of those officer/(s) be obtained to ascertain that on whose order the tariff was changed that has resulted in a loss of more than one billion rupees.

The actual loss be ascertained and calculated. I want all this to be done within 10 days." Admitting that the original file of tariff is not available in his office, the KWSB Deputy Managing Director (Revenue Resource Generation), Syed Akhlaq Hussain, informed the nazim through the MD that he had never recommended or prepared any revised tariff in writing.

He, however, stated that whenever called for discussion, he accompanied the KWSB MD and other senior officials at the meetings. Mr Hussain said that though he did not have the original file with him, he did possess some papers and note sheets with his comments.

With regard to the names of the officers responsible for tariff revision, Mr Hussain maintained that after 1990, the tariff was mostly revised under the advice and direction of the World Bank Mission through gazette notifications, keeping in view the desired improvement of revenue to make the KWSB capable of paying back the WB loans.

Elaborating, he said that this was the reason that the conservancy charges at the rate of 50 per cent of water charges had been introduced in 1990. Initially, the charges were applicable to the consumers connected with the KWSB sewerage system falling within the jurisdiction of the (now defunct) KMC.

However, the tariff of 1996 removed this condition on the directive of the WB Mission making every consumer liable to pay the sewerage and conservancy charges with effect from July 1995.

"This change had its implications for which the proposed tariff includes a suggestion to proportionate the charges against sewerage depending upon the level of service the KWSB is providing.

"Later, the notification of 2001 was revised in the light of a letter dated March 2001 on the proposal submitted by the then KWSB MD in consultation with the finance department and other senior KWSB officers. The RRG department never initiated any exercise on its own."

Regarding the losses suffered by the KWSB, he said: "Since the inception of independent tariff structure for the KWSB, the decrease has been incorporated only once, when the rate of water charges, etc. were de-linked from the NARV."

This decrease, he added, was not, in fact, statistical, rather adopted on the advice of Sindh Excise and Taxation Secretary and sent vide his letter No. SO (Taxes)/E&T/3(227)2001/43 dated March 30, 2001 in the light of the possible increase in the assessment value of property.