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Water set for price hike
The Vientiane Water Supply Enterprise plans to increase water rates as it faces higher production costs and falling revenues, according to a top company official.
“We have submitted our proposed plan to the Vientiane Mayor for consideration and approval but have not yet received a response from the higher authorities,” Managing Director of the state-owned enterprise Mr Daophet Buapha told Vientiane Times yesterday.
He made the comments to clarify a report from the government that rising inflation was partially caused by the higher cost of water. He said the enterprise has not increased water rates yet, but has submitted a proposal to do so.
Mr Daophet said the enterprise was requesting the price increase because it could no longer subsidise the current price, which is much lower than the actual production cost.
“The average charge is now only 1,300 kip per cubic metre, while the cost of production is 1,600 kip per cubic metre,” he said, adding that the cost of electricity and water treatment raw materials have increased, placing even more pressure on the company to adjust water rates.
He could not say when capital authorities would give the green light for the price hike, but stressed the importance of adjusting prices to allow the company to continue to grow in a market oriented economy.
According to enterprise officials, the company plans to increase water rates from the current 1,350 kip per cubic metre (cbm) to 1,650 kip per cbm in 2011, then to 1,850 kip per cbm in 2012 and 2,050 kip per cbm in 2013, hoping that small increases over a number of years will place less strain on household budgets.
Officials said the price increase would enable the company to grow and expand water supply to meet increasing demand in the capital, adding that demand is currently higher than the current supply capacity.
The Vientiane Water Supply Enterprise teamed up with a Vietnamese firm last year to invest about US$5 million in a water treatment facility in Dongbang village, some 25km from central Vientiane.
The joint venture began selling water to the enterprise for distribution at 1,350 kip per cbm in May 2010. The treatment plant produces 20,000 cbm a day.
Higher water bills are expected to place even more pressure on the government's efforts to curb rising inflation. The government hopes to lower inflation from the 9.24 percent recorded in April to about 6.5 percent this year.
vientiane times
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