NMC likely to hike OCW’s rate for the fifth consecutive year

Nagpur: Cash-strapped Nagpur Municipal Corporation (NMC) is all set to increase the rate being paid to private water operators at Orange City Water Private Limited (OCW) for the fifth consecutive year. OCW payment will increase to around Rs 98 crore per annum from Rs 72 crore.
NMC sources told TOI that the proposal to increase rate to Rs10.72/unit from existing Rs 10.43 per unit has been received by the OCW. “NMC’s special purpose vehicle, Nagpur Environmental Services Limited (NESL), will be approving the hike for OCW after checking the wholesale price index (WPI) and consumer price index (CPI).Municipal commissioner Shravan Hardikar will approve the new rate without requiring any consent from the standing committee or the general body,” the sources said.
If approved, it will be a hike of 36% in last five years. The NMC had entered into an agreement with OCW for a rate of Rs 7.90/unit in 2011-12.
The revision in OCW rate will increase NMC’s huge financial losses from water works and also the burden on hapless water consumers. NMC used to incur a loss of around Rs14 crore per annum before handing over water works to OCW. The losses increased to Rs75 crore after roping in OCW.
It happened due to the controversial agreement signed with OCW. NMC agreed to pay OCW for 250 million liters per day (MLD) as against water billing of around 185 MLD. The rate was fixed at Rs7.90 per unit despite water tariff at Rs5 per unit. Also, provisions of increase in OCW rate were made in the agreement. The OCW rate was linked with WPI and CPI. Hike is given as per the revisions made in these two indexes every year.
To cope up with regular hike in OCW rate, the NMC is increasing the water tariff in every fiscal since 2011-12. The hapless water consumers are facing 5% hike in water tariff every year. Still, the hike in OCW rate is much more than that of water tariff. OCW’s new rate will be Rs10.72 per unit while minimum water tariff is Rs6.68 per unit.
Chairman of water works consultative committee Sandip Joshi said he was not aware of any such proposal.
Leader of opposition Vikas Thakre said, NMC should terminate agreement with OCW as citizens are going to face high water tariff every year. “OCW failed on all accounts, be it water supply, water losses, metering, revenue and execution of 24x7 water supply project. Even services deteriorated since NMC roped in OCW. NMC is gifting crores to OCW as rate is not linked with performance,” he said.
OCW said services have improved to a great extent in various parts of the city since it took over the water works. “Around 3 lakh people benefit from 24x7 water supply.”
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OCW Rate
Year------Rate------------Hike------Amount
2011-12--7.90------------00---------72
2012-13--8.692----------10----------79
2013-14--9.205----------17----------84
2014-15--9.522----------21----------87
2015-16--10.43----------32----------95
2016-17--10.72----------36----------98
(Rate in Rs, hike in % and amount in Rs/crore)