The Dhaka Water Supply and Sewerage Authority (WASA) plans to divide the city into 10 zones and set water prices on area and customer-wise.
DWASA came up with the plan at a function held at a city hotel on Sunday while disseminating the findings of a joint study on area-based water pricing conducted by WASA and WaterAid.
Under the plan, WASA is planning to divide the city into 10 zones to fix the prices of water based on areas.
It will reduce existing subsidies to zero gradually by charging water prices higher for posh areas and households of Dhaka.
Speaking at the function, Local Government, Rural Development and Co-operatives Minister Tajul Islam said DWASA gets a huge amount of subsidies from the government but in fact, much of benefits of these subsidies go to affluent sections in Dhaka.
"Lower income people are deprived of WASA water although they are paying equal tariff," he said.
According to the study, the current heavily subsidised flat tariff rate is well below the production cost of water.
The subsidy is meant to alleviate some burden on the poor, who have to pay a larger share of their incomes to access water," it said.
It added: "Instead, the benefits are largely enjoyed by the affluent, which often leads to wastage and inefficient use."
According to Bangladesh National Building Code 2020, per capita water consumption among relatively affluent people in Dhaka is 260 litres per day compared to 80 litres for households in the low income group.
Technical Adviser of WaterAid Bangladesh Tahmidul Islam said the idea behind these systems is that the users in relatively posh areas and high-income group will pay a higher rate than low-income group.
He said different tariff rates have been proposed for these categories following the national cost sharing strategy for water supply and sanitation 2012-the tariff rates for upper consumption blocks should be increased at 25 per cent rate from the base tariff.
He said they considered the estimated production cost at consumer's level is Tk 25/1000L which will be replaced by the actual figure, once another study is done by DAWSA.
"For the proposed area-based water tariff system, the production cost rate of water supply system has been considered as the base tariff and for middle income consumers," he said.
At present, the price of 1,000 litres of water in Dhaka for residential customers is Tk 15.18 and Tk 42 for commercial customers.
WASA currently spends Tk 25-26 to produce every 1,000 litres of water.
However, the proposed price will be discussed further at customer level.
As per the proposal, the price is proposed to be Tk 37.50 per 1000 litres of water for upper-class residential consumers.
According to the WASA data, 0.80 per cent of WASA's customers in the city belong to the upper class.
The price of water for upper middle class households has been fixed at Tk 31.25.
The middle-class people of the capital will get water at the production price who account for 4 per cent of WASA's total customers in Dhaka.
The price has been proposed to be Tk 25 which is Tk 9.82 more than existing prices.
For the lower middle class, who account for 79.4 per cent of WASA's total customers in Dhaka, the price is proposed to be Tk 18.75, which is Tk 3.57 more than present prices.
Low-income people will pay Tk 12.5 for the same amount of water.
Commercial customers of WASA are currently paying Tk 42 per thousand litres of water. Government institutions will pay the same as production cost of Tk 25.
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