KARACHI, June 7: Terming financial constraints the root-cause of many problems faced by the city’s water supply and drainage systems, the Japan International Cooperation Agency (JICA) has observed that the KWSB would already have gone bankrupt had the federal and provincial governments not put in funds to help it cope with its accumulated deficits.

Discussing the utility’s financial stability, a JICA team tasked with studying the city’s master plan for water supply and sewerage systems and make recommendations, said that the KWSB financial statements of recent years had shown an extremely worrisome trend.

“Over the recent years, the KWSB has continuously been operating in deficit and the annual deficit ranges from Rs2,000 million to Rs2,700 million,” the report said, pointing out that at the end of the fiscal year 2004-05, the accumulated deficits amounting to Rs10,435 million were eventually financed by the federal and Sindh governments. “Otherwise the KWSB would already have gone bankrupt,” it added.

The report also pointed out that the KWSB financial statements showed that “electricity charges’ and “personnel costs” were the two major components of its operation and maintenance (O&M) expenditure and in the fiscal year 2004-05 and these two components constituted 57 per cent and 30 per cent of the total O&M expenditures (before depreciation), respectively.

It said that it was worth noting that approximately 50 per cent of the electricity charges (or 28 per cent of the total O&M expenditure) were currently being incurred at the Dhabeji pumping station and another 20 per cent (or 11 per cent of the total expenditure) at three other locations, i.e. the Pipri, North-East Karachi (NEK) and Hub pumping stations.

The report said that the KWSB should focus on enhancing revenues and ensure better management of services on an urgent basis. It should have its own power plants to operate its major pumping stations, the report added.