| Abstract | The Dhaka Water Supply and Sewerage Authority (DWASA) is responsible for water supply in
Dhaka city. At present, it can supply only 65 % of the current demand. Therefore, development
program is needed to meet the rest 35% unmet demand. In that case, the most important
requirement is strong financial capability. Unfortunately, it is financially very weak due to poor
cost recovery. The main causes of poor cost recovery are: (1) faulty price policy, (2) high level
of unaccounted for water (UFW), and (3) huge amount of unpaid bills.
With the objective of recommending measures for improvement of cost recovery, this study has
analyzed the causes of the three identified problems with the data collected from secondary as
well as primary sources. Primary sources data were collected through interview and
questionnaire survey, conducted among the DW ASA officials, the slum dwellers and the
residential consumers.
The analysis reveals that the price cannot cover the full cost and the structure of price creates
obstacles to smooth recovery of revenue. To correct these faults in price policy, requirement is:
progressive price structure based on cost consideration. To move in this direction, the needs are:
autonomy and commercial orientation.
The analysis of UFW shows that a part of water supply is lost before reaching the consumer
points due to poor maintenance of leakages of the pipelines. A good deal of water is sold
without measuring. This happens due to non-metered connections. Some water is lost due to
illegal connection. Incorrect registration of meter and meter fraud nullify sale contract to some
extent. In some cases, officials destroy norms of sale contract by making collusive relations with
the customers. Inefficiencies in the systems of billing, payment and dispute resolution are the
causes of the problem of bills remaining unpaid. All these faults are actually the faults in the
process of sales. Therefore, the requirement is: facilitating sale of water effectively. To fulfill
this requirement, the needs are: creation of department of sale, zonal sell center, protection and
measurability of water and turning consumer as customer.
The existing conventional legal and administrative measures cannot fulfill the above
requirements. Apart from the conventional measures, recently DW ASA has used a market-based
instrument namely leasing out of the 'revenue collection'. This measure has established
measurability of water and norms of sale contract to some extent. As a result, it has achieved
remarkable success in cost recovery. This success can be extended if DW ASA will lease 'sale of
water' in addition to the recently adopted leasing of 'revenue collection'.
On the basis of above analysis, this study proposes a tow-prong change comprising of policy
level change and management level change: ( 1) For policy level change, the recommendation is
to transform DW ASA as an independent business unit and make sale as the centerpiece of its
business. Implementation measures for this change are: (a) give autonomy, (b) set progressive
pricing on cost based, (c) create department of sale, and (d) create zonal WASA. (2) For
management level change, the recommendation is to ensure sale of water. Necessary
implementation measures for this change are: (a) lease sale of water, (b) introduce 100%
individual metering, (c) introduce district metering, and (d) create consumers parliament. |