Kerala Water Authority's Financial Crisis Deepens with Rs 4.66 Loss per 1,000 Litres

Thiruvananthapuram: The Kerala Water Authority (KWA) is grappling with severe financial strain, incurring a loss of Rs 4.66 for every 1,000 litres of drinking water supplied during the 2024-25 fiscal year, as per data from the water resources department. This alarming deficit highlights the growing gap between operational costs and revenue recovery, threatening the sustainability of water supply services across the state.

Mounting Annual and Cumulative Losses

The cost of producing and distributing 1,000 litres of water stood at Rs 24.56, while the revenue realized was only Rs 19.90. This disparity translated into an annual loss of Rs 317.63 crore for the financial year. Cumulatively, KWA's losses have now reached a staggering Rs 7,156.76 crore, underscoring a long-standing revenue deficit that has persisted since the authority's inception. Non-plan grants from the state government have only partially offset this shortfall, failing to address the root causes of the financial crisis.

Revenue Sources and Escalating Expenditures

Government-approved water tariffs remain KWA's principal source of income. However, expenditures have steadily increased, driven by:

Salary and pension commitments
Rising electricity charges
Maintenance costs
Loan repayments with interest

Tariff revisions have not kept pace with the surge in operating costs, exacerbating the financial imbalance. Under the Water Supply Regulation Act, 1986, water charges are mandated to be fixed on a no-profit, no-loss basis. Additionally, Section 15(iii) of the Act prohibits KWA from revising tariffs without prior government approval, a process often mired in political sensitivity.

Political Debates and Opposition Criticisms

Political tensions over tariff revisions have surfaced repeatedly in the state assembly. On February 7, 2023, the opposition raised concerns about increasing water tariffs. Defending the hike at the time, Water Resources Minister Roshy Augustine cited KWA's consolidated loss of Rs 4,911.42 crore, mounting dues to the Kerala State Electricity Board Ltd amounting to Rs 1,263 crore, and rising chemical costs.

Opposition leader V D Satheesan countered that successive increases in water tariffs, alongside hikes in power and fuel prices, have burdened households. He argued that while the minister described the hike as 1 paise per litre, the monthly impact on consumers was significantly higher. Satheesan also alleged high levels of non-revenue water and inefficiencies within KWA, contending that distribution losses were being unfairly passed on to consumers. The 2024-25 figures presented in the assembly confirm that the gap between cost and recovery continues to widen.

Unpaid Dues from Institutional Consumers

As of December 2025, unpaid dues from institutional consumers add further strain to KWA's finances. Public sector undertakings owe Rs 18.44 crore, while government institutions account for Rs 123.24 crore in arrears. Together, public and government sector entities account for Rs 141.68 crore in pending dues. Notably, there are no large private institutions with arrears exceeding Rs 25 lakh, highlighting a disparity in payment compliance.

Recovery Measures and Challenges

Minister Augustine informed the assembly that KWA has initiated multiple steps to recover arrears from defaulters, though these efforts have been described as half-hearted. In 2022, the water resources department wrote to all department secretaries directing the clearance of pending water charges. Since then, the KWA managing director has issued annual reminders to heads of departments.

In 2023, the managing director wrote to the finance secretary seeking deduction of arrears at source from local self-government institutions and government establishments, with amounts to be transferred to KWA. Additional measures include:

Officers from KWA headquarters visiting defaulting institutions
Deployment of section-level squads to intensify recovery efforts
Coverage of departments willing to settle dues under a 'one-time settlement scheme'
Organization of revenue adalats to resolve pending amounts with permissible concessions
Issuing disconnection notices and cutting water supply for non-payment
Allowing instalments of up to 10 payments for large pending bills
Initiating revenue recovery proceedings
Sending SMS reminders urging payment

Despite these initiatives, the persistent financial losses and unpaid dues indicate that more robust and effective strategies are urgently needed to stabilize KWA's operations and ensure reliable water supply for Kerala's residents.