KARACHI, Jan 8: The Karachi Water and Sewerage Board has plans to commence a study funded by the Asian Development Bank to develop tariff policies and objectives for urban environmental services in the city, sources in the KWSB told Dawn.

Officials said the KWSB’s financial performance has always been weak as its tariffs were low and service levels poor.

“In line with increased water supplies there is an urgent need to improve cost recovery to finance proper operations and maintenance expenditures to ensure long-term sustainability of systems,” said a source, adding: “Besides, it is also needed to provide for future routine and replacement capital expenditure and debt service.”

Officials said the tariff studies would be carried out in conjunction with Japan International Corporation Agency’s physical master planning study.

“In assessing future tariffs, the consultants would take into account future investment requirements and their possible funding sources,” said an official.

The tariff studies would be conducted over a nine-month period commencing this year, some three months before the completion of JICA’s physical master planning study to allow for discussion with the engineers and to obtain investment plans. Estimated consultancy requirements include 14 months of foreign consultants and 25 months of local consultants.

The outputs of the project would include a comprehensive set of tariff policies and objectives (cost recovery, financial, affordability, economic, environmental) and targets for the water supply, sewerage and solid waste systems in the metropolis. Besides, a detailed financing plan and financial projections for KWSB incorporating proposed sector investment plans over the next 10 years would also be inclusive.

According to official figures, the existing revenue from tariffs barely covers operation and maintenance of the water and sewerage utility. The collection efficiency is a bit more than 50 per cent. Besides, the tanker service supplies water to 30 per cent of the unauthorized settlements.