Dhaka Wasa had sent a letter to the LGD, seeking approval to set tariffs on per unit of water at Tk20 for residential and Tk65 for commercial uses
The local government ministry has turned down Dhaka Water Supply and Sewerage Authority's (Wasa) proposal to increase water tariffs.
Confirming the matter on Tuesday, Muhammad Ibrahim, additional secretary (water supply branch) of the Local Government Division (LGD) said that Dhaka Wasa's proposal to hike water tariffs has not been entertained further.
"So far, no decision has been made. The LGD has disagreed with the proposal," Ibrahim told The Business Standard.
On September 2 last year, Dhaka Wasa sent a letter to the LGD secretary, seeking approval to set tariffs on per unit (1,000 litres) of water at Tk20 for residential and Tk65 for commercial uses, an overall increase of 80 percent than the existing tariffs.
Presently, the tariffs are Tk11.57 and Tk37.04 for residential and commercial uses respectively. In 2009, the tariff on per unit of water was only Tk6.
In the letter sent to the LGD, Dhaka Wasa Managing Director Taqsem A Khan made excuses that the tariff hike is a must to cover additional expenditures in implementing several development projects, as well as to meet the increased operational costs.
Responding to the letter on January 14 this year, the LGD inquired about Dhaka Wasa's loans, operational costs and existing water tariffs.
The division also inquired about the current water tariffs in New Delhi and Kolkata of India, Kathmandu of Nepal, Seoul of South Korea, Manila of the Philippines, London of the United Kingdom, and Stockholm of Sweden.
Two days later, Dhaka Wasa replied in a letter that its loans for implementing development projects are around Tk600 crore, and the current production and distribution costs of per unit of water stand at Tk25.
Dhaka Wasa also cited that each unit of water prices in New Delhi, Kathmandu, Seoul and Stockholm were Tk10 to Tk28 higher than the current tariffs in Dhaka.
"Readjustment of water tariffs is needed to cut down subsidy, as well as making Dhaka Wasa financially sustainable," Taqsem told The Business Standard.
Meanwhile, lawyer Humayun Kabir Bhuiyan, general secretary of the Consumers Association of Bangladesh, said, "Further increase in water tariffs is unnecessary when Dhaka Wasa is failing to supply adequate as well as quality water to its consumers.
"All types of commodity prices have already increased. Therefore, water price hike will create a huge burden on the city dwellers."
A 2019 study by the Transparency International Bangladesh (TIB) revealed that among the Dhaka Wasa consumers, 44.8 percent were deprived of adequate water supply, 51.5 percent got unclean water and 41.4 percent got foul-smelling water.
The TIB study also revealed that around 37.5 percent of the consumers are unsatisfied with the Dhaka Wasa service.
"The TIB believe that Dhaka Wasa's proposal to increase water tariffs by 80 percent in the residential and commercial sectors is illogical, unacceptable and detrimental to the consumers," the anti-graft organisation said in a press release on Tuesday.
Commenting on the issue, TIB Executive Director Dr Iftekharuzzaman said, "Before illogically hiking the tariff on water supply, it is necessary to ensure good governance in Dhaka Wasa by curbing irregularities and corruption in processes such as procurement, project implementation and reading metres."