WASA to seek Rs. 2bn bailout package from Punjab Government.

LAHORE: Financial crunch has forced the Water and Sanitation Agency (Wasa) to seek an Rs2 billion bailout package from the Punjab government with immediate effect to deal with various operational and administrative affairs.

A summary has been moved to Chief Minister Usman Buzdar through the secretaries (housing and finance departments) and the chief secretary.

“Wasa (Lahore) has put its utmost efforts to enhance its financial resources. But, due to the indispensable factors, it is in dire need of government assistance in the shape of a bailout package amounting to Rs2,000 million (Rs2 billion) to run the affairs of its business as well as to dispose of liabilities,” says the summary which had been moved a couple of days ago.

Wasa (Lahore) is the second-largest water utility in Pakistan that has been serving a population of more than eight million people. Its operating area is more than 350 sq-km and major responsibilities include the provision of potable water and sewerage facilities to its consumers as well as drainage facilities to the whole city. It has the only source of underground water extracted by almost 600 tubewells within the area of jurisdiction. Similarly, it has to operate with more than 120 disposable stations to dispose of sewage in the city.

according to the summary, Wasa is facing an acute financial crisis these days. Wasa’s approved current financial year (2020-21) budget deficit is over Rs5.504 billion. And to compensate for the deficit, the government of Punjab has been providing a subsidy to the tune of Rs 2.2 billion (2,200 million) per annum. Thus, the net budget deficit for the current financial year 2020-21 is over Rs2.879 billion as approved by the LDA’s governing body.

The summary also points out main reasons behind such a huge deficit, stating that it is mainly due to non-revision of domestic tariff which is kept frozen since 2004, whereas the agency’s expenditure has increased manifold due to concurrent increase in rates of electricity, POL (petrol, oil & lubricants), pension, staff salaries, etc. Unfortunately, the subsidy (Rs2.2 billion) provided by the Punjab government to Wasa in lieu of frozen tariff also stands frozen at the same level since 2012. And it does not take into account the recession and increase in agency expenditure since 2012.