New cost reflective tariff structure for household water in Sri Lanka

Abstract

The main purpose of this study is to identify critical factors affecting

the design and implementation of a cost reflective tariff system for domestic

water supply in Sri Lanka. This study was carried out through a situational

analysis, survey and in-depth interviews with various stakeholders in

the Sri Lankan water sector. A structured questionnaire survey identified the

economic affordability of randomly selected customers in the Western Province

of Sri Lanka. The situational analysis shows that the national water supply

entity, National Water and Drainage Board, in Sri Lanka is unable to recover

the cost of supplying domestic water, owing to the non-existence of a cost

reflective domestic tariff system. Survey responses show that the existing tariff

structure has failed to generate sufficient rate of return by achieving equity. The

methodology employed and the policies derived can be used as guides to

similar types of research in other countries as well.