Audit Report of 2014/15

KUKL's revenue down by Rs 82 million

Published On: March 23, 2017 12:50 AM NPT By: Republica  | @RepublicaNepal

KATHAMANDU, March 23: Total revenue of Kathmandu Upatayaka Khanepani Limited (KUKL) fell by Rs 82 million to Rs 786 million in Fiscal Year 2014/15.

The decline in water utility's revenue has been attributed to drop in water supply in the Kathmandu Valley, according to an audit report endorsed by 5th AGM of KUKL held in Kathmandu three weeks ago. 

According to the report, revenue from water bills fell by Rs 51 million to Rs 619 million in 2014/15. Similarly, its earning from sewage bills also fell by Rs 16 million to Rs 161 million.

The audit report says that KUKL's revenue fell because of decline in water consumption by its customers. But the report has not outlined the reasons behind the drop in water supply. However, previous study reports say that leakage is one of the main factors behind drop in water supply. Around 40 percent of drinking water in KUKL's system goes to waste due to leakage. 

The audit report says that KUKL suffered net loss of Rs 48 million in 2014/15, compared to net profit of Rs 23 million in 2013/14. KUKL, which was established nine years ago, has accumulated loss of Rs 587 million till 2014/15.

Suresh Prasad Acharya, the spokesperson for KUKL, said rise in pay and perks of staff members as well as increased administrative and maintenance costs have increased the water utility's expenditure“ "KUKL is facing losses because Water Supply Tariff Fixation Commission is dragging its feet to hike water tarif”," argued Acharya. 

KUKL's total expenditure increased to Rs 399 million in 2014/15, up from Rs 384 million in the previous fiscal year. 

Despite logging losses, KUKL has been managing its cash flow by not paying lease fee to Kathmandu Valley Water Supply Management Board. 

KUKL has taken all assets and facilities from the board on a 30-year lease.
The water utility's financial report of Fiscal Year 2015/16 is yet to be audited. 

KUKL has been established under public private partnership model to distribute Melamchi water in the Kathmandu Valley. However, the entity has not been able to function as a professional body due to increasing political influence. 

As Melamchi water is reaching Kathmandu by the end of this year, stakeholders have emphasized reforms in KUKL. 

Government's representative Ghanashyam Bhattarai, who is the joint secretary or executive director of Melamchi Water Supply Project, has been elected as KUKL chair last week. He has replaced Suresh Basnet - a representative of Nepal Chamber of Commerce in the KUKL board. 

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