The Maharashtra Industrial Development Corporation (MIDC), responsible for quenching the industrial and residential thirst of the state, is facing mounting unpaid water bills.
Despite significant expenditure on upgrading its water supply schemes, the MIDC is struggling financially due to rising water and electricity costs.
Consequently, the corporation has proposed an increase in water tariffs. This proposal was postponed due to assembly elections but the new government is likely to be implement the same soon.
Over the past few years, the MIDC has invested heavily in upgrading and expanding its water supply infrastructure across the state. This includes replacing pipelines, constructing new water purification plants, building water tanks, and updating pumping machinery.
“Five years ago, the height of the Barvi Dam was increased to enhance its water storage capacity. Projects like replacing the 1800 mm diameter mild steel pipelines and updating the water purification plant under the Barvi Water Supply Scheme are also underway. These upgrades have significantly drained MIDC’s funds,” sources said.
Despite these expenses, MIDC has not increased its water tariffs in the past 11 years. The current rates for industrial and non-industrial water use have been in place since March 1, 2013. The Maharashtra Water Resources Authority issued a circular on March 19, 2022, implementing a 90% increase in water charges effective June 1, 2022, with a 10% annual increase thereafter.
Similarly, the Maharashtra Electricity Regulatory Commission increased electricity rates on March 30, 2020, resulting in an average 10% hike in MIDC’s electricity expenses.
“With water taxes and electricity charges being key components in determining water tariffs, the discrepancy between rising costs and the rates paid by government institutions continue to widen, putting MIDC’s water supply operations at a loss,” sources said.
Considering the operational expenses and actual revenue from its water supply schemes, MIDC faces significant financial obligations amounting to Rs 20,071.62 crore. This includes committed liabilities of Rs 10,332.52 crore and proposed liabilities of Rs 9,739.04 crore.
Despite not increasing water tariffs since 2013, the primary cost components—water charges and electricity rates—account for 60.80% of the total expenses, with proportions of 35.36% and 25.44%, respectively.
Annually, both water and electricity costs rise by 10%. As a result, while MIDC’s expenses have surged by 67% since 2013, its revenue has only increased by 27%. Given these factors and the current economic situation, MIDC has proposed an annual increase in water tariffs in line with the rise in water and electricity charges.
