NWSDB Profits Surge: Sri Lanka Water Board’s Financial Turnaround

NWSDB reports a profit of 5.2 billion rupees in 2023.

Sri Lanka’s state-run National Water Supply and Drainage Board (NWSDB) has recorded a significant profit of 5.2 billion rupees for the year ending December 2023, following a substantial tariff increase. Despite not receiving payment for 25 percent of the water it distributes, the NWSDB has managed to turn around its financial performance.

According to a Finance Ministry report, total revenues surged to 61.8 billion rupees in 2023, up from 35.4 billion rupees the previous year. Water revenue alone increased dramatically to 58.5 billion rupees from 33.1 billion rupees. However, the cost of sales also rose, reaching 32.8 billion rupees compared to 23.14 billion rupees in 2022. This increase in revenue and managed costs led to a boost in gross profits from 12.3 billion rupees to an impressive 29.0 billion rupees.

Finance costs saw a significant rise, escalating to 14.9 billion rupees from 3.9 billion rupees. Nevertheless, the NWSDB reported a net profit of 5.2 billion rupees, a stark contrast to the 2.7 billion rupees loss recorded the previous year. This turnaround was partly facilitated by a 28 billion rupees injection from the Treasury to settle loans.

During the Rajapaksa administration, macroeconomists in the Finance Ministry employed a strategy of making state enterprises borrow money through Treasury guarantees, listing these as ‘contingent liabilities.’ This approach allowed for the understating of both the budget deficit and national debt.

Water tariffs were raised by 81 percent after macroeconomists printed money to suppress interest rates, leading to a currency collapse when they attempted to float the rupee with a surrender rule in place. Non-revenue water, which accounts for 25.2 percent of the total, remains a challenge. In some districts, religious establishments and services like common toilets for underserved communities contribute to this non-revenue water.