LAHORE: All the five water and sanitation agencies (WASAs) of the province are facing a severe financial crunch triggered by the stoppage of subsidies to them by the Pakistan Tehreek-i-Insaf (PTI) government about four years back. They have sought a cumulative bailout package of Rs6.78bn from the incumbent Punjab government to come out of the crisis as well as to pay the outstanding bills of the electricity supply companies WASAs have defaulted on.

On the other hand, the Lahore Electric Supply Company (Lesco), Gujranwala Electric Power Company (Gepco) and Multan Electric Power Company (Mepco) have disconnected power supply to WASAs of Lahore, Gujranwala and Multan for defaulting on huge bills of hundreds of millions of rupees. Only Wasa Lahore is reportedly a defaulter of Rs700m, Dawn has learnt.

According to a summary moved to the chief minister by the Housing, Urban Development and Public Health Department, in whose collaboration WASAs work, Rs6.78bn bailout package has been sought to run day-to-day affairs, especially clearance of electricity bills of these civic agencies include Rs2.62bn for Lahore WASA, Rs953m for Faisalabad WASA, Rs640m for Gujranwala WASA, Rs1.8bn for Multan WASA and Rs1.4bn for WASA of Rawalpindi.

Agencies default on huge bills of electricity companies; crisis worsened by halt of subsidies by PTI govt

“The chief minister is requested to kindly approve the financial support to WASAs and provision of funds amounting to Rs6.78bn for clearance of outstanding liabilities of the electric supply companies,” the summary says.

It may be mentioned that all the five WASAs of the province have continued to be in trouble for the last many years due to various issues. The situation of Lahore WASA is more disturbing since it is a huge organisation of over 10,000 employees, covering a vast area of the metropolitan city of Lahore. The PTI government had stopped subsidies to various departments, including the WASAs, when it came into power in 2018.

“In 2004, the agencies requested the government to allow it to increase water tariff, keeping in view the increasing electricity rates so that they should not be dependent on the government funds and run their operational and administrative affairs on their own. However, the provincial governments didn’t allow them to do so, saying the tariff shouldn’t be increased as the consumption of water is a basic right under the Constitution,” explains a senior WASA official who requested not to be named.

The official said there was no interest on the part of the governments to at least rationalise the water tariff, keeping in view the increasing cost of electricity and other expenditures. As a result, WASAs revenue couldn’t be increased, forcing the agencies to keep seeking funding and subsidies to run their day-to-day affairs. Eventually, the expenses related to electricity bills and other costs kept piling up, bringing these water and sanitation agencies under severe financial stress with each passing year, the official said.

“The revenue we are collecting each month enables us to pay salaries to our employees or do some petty works. But it cannot clear the huge electricity bills or help us launch and complete development schemes and other works.”

He said previously, the government used to give some subsidies to WASAs to keep them financially strong. But it was also stopped for the last four years or so. “During the last days of the PTI tenure, we succeeded in convincing the government to at least release us some subsidy as there was no increase in the water tariff. A summary was moved to the then CM Sardar Usman Buzdar. But it couldn’t be approved due to the sudden change of the government,” he revealed.

He said the government, on the one hand, has recently given Rs200bn subsidy for provision of flour to the people on cheaper rates but on the other hand, it was reluctant to give annual subsidy to WASAs, which were also providing services to the people at very cheap rates. As a result, the agencies had been badly burdened financially.

“The bailout package’s approval on an urgent basis is a need of the hour and the government must allow WASAs to increase the tariff, raise revenue and make them self-sustainable,” the official recommended.

Published in Dawn, May 28th, 2022