MIDC to Raise Water Charges Due to Rising Costs

MIDC to Raise Water Charges Due to Rising Costs

Amidst increasing financial pressures, the Maharashtra Industrial Development Corporation (MIDC) has proposed an increase in water tariffs, a decision that comes in response to rising water and electricity costs. The corporation, which plays a vital role in managing water supply for both industrial and residential sectors, has been grappling with mounting unpaid bills, despite heavy investments in upgrading its infrastructure.

The MIDC’s water supply schemes have seen substantial expenditure in recent years. These include critical upgrades such as the replacement of outdated pipelines, the construction of new water purification plants, and the expansion of storage capacity at key locations like the Barvi Dam. While these projects aim to bolster the state’s water infrastructure, they have significantly strained MIDC’s financial resources. “Five years ago, the height of the Barvi Dam was raised to boost its water storage, and major upgrades, including the replacement of 1800 mm diameter pipelines, are still underway,” sources within the corporation stated.

Despite these extensive costs, the MIDC has not increased water tariffs in the past 11 years, with the current rates remaining unchanged since 1 March 2013. The Maharashtra Water Resources Authority had issued a circular in March 2022 that mandated a 90 percent increase in water charges from June 2022, with a subsequent 10 percent annual increase. This was expected to partially mitigate the financial strain, but the effects are yet to be felt fully. In addition to the rising water costs, the Maharashtra Electricity Regulatory Commission’s decision to hike electricity tariffs in March 2020 has led to a further 10 percent rise in MIDC’s energy expenditure. Water and electricity charges now account for a significant portion of the MIDC’s operating costs, with these two components representing 60.80 percent of the total expenditure. Given that both costs are rising by 10 percent annually, while revenue has lagged behind—growing only by 27 percent since 2013—the corporation faces mounting financial obligations.

As of now, MIDC’s liabilities total INR 20,071.62 crore, including both committed and proposed liabilities. To counteract the growing deficit, MIDC has proposed an annual water tariff increase, aligned with the rising costs of water and electricity. This increase, which had been delayed due to the state assembly elections, is expected to be implemented by the new government soon. MIDC sources argue that this hike is necessary to ensure the continued viability of the corporation’s water supply operations and avoid further losses. As the financial burden continues to grow, MIDC is also exploring long-term solutions to reduce the impact of rising operational costs, including more efficient water management practices and the introduction of additional revenue-generating measures.