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Oct 28, 2009

Deadlock persists over water tariff revision

The Coimbatore Corporation is yet to succeed in its efforts to convince the parties in the Council on the need to increase the tariff for drinking water supplied across the city under the Siruvani and Pilloor schemes.There are indications that the Corporation may hold yet another meeting with the leaders of the parties to facilitate an approval by the Council of the rates suggested by the Government.

In February this year, the Department of Municipal Administration and Water Supply suggested changes to the tariff on the grounds that these may help the Corporation in generating the revenue required to fund schemes to augment water supply, especially in the light of the civic body’s plan for 24-hour supply in the city.

Two to three all-party meetings failed to reach any accord over the tariff, as councillors were opposed to an increase. They wanted the supply situation to be improved first. Their argument was that people could not be asked to pay more when less water was supplied to them.The Corporation has begun the works on the Phase II scheme and it says that unless adequate revenue is generated under the water supply account the civic body will find it difficult to repay loans got to implement the Rs.113-crore scheme.

Corporation Commissioner Anshul Mishra says the annual revenue on the water supply front is only Rs.20 crore. A large chunk from this goes towards repairs to and maintenance of the lines in the existing schemes. The Central Government is providing 50 per cent of the project cost as grant. While the State Government will provide a 20 per cent grant or interest-free loan, the rest 30 per cent will have to be mobilised by the Corporation. This portion, in all probability, will come only in the form of loan with interest.

On the argument of the councillors that water supply will have to be improved before increasing the tariff, the Corporation says this is not possible.First, the scheme has to be implemented to improve supply. For this, funds are needed. And, the funds can come only through loans and grants.But, the Corporation has to demonstrate clearly its revenue-generation capacity if it has to get funds for the project, especially loan.

The demonstration of this capacity is a condition under the Jawaharlal Nehru National Urban Renewal Mission for the release of grants and loans.

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