(MENAFN- Muscat Daily) Muscat- Total subsidy provided by Oman's government for water increased nearly three per cent to RO185.72mn in 2016 compared to RO180.66mn in the previous year, according to the Public Authority for Electricity and Water (PAEW).
However, PAEW maintained the subsidy per cubic metre of water distributed to 900bz per cubic metre, which is close to the subsidy in 2015.
'Subsidy continues to rise as demand rises and costs continue to increase, while the domestic tariff (which accounts for about 52 per cent of water sales) has remained unchanged for many years', PAEW said in its recently released annual report.
The Authority's tariffs recover only a part of its total costs and the remainder come as subsidy from the government.
However, it said the gross average subsidy per account fell to around RO426 in 2016 from RO445 in 2015, mainly due to efficiency savings.
The subsidy for 2016 represents 563bz per cubic metre of water entering the PAEW system or about 900bz per cubic metre distributed. Excluding the impact of depreciation charges, which reflect investment in PAEW's system, the average subsidy was about four per cent lower in 2016 than the previous year, PAEW said in its report.
In 2016, PAEW's revenues increased 14.4 per cent to RO102.63mn while expenses rose 6.6 per cent to RO288.45mn. PAEW said the subsidy now accounts for almost two-third of its total costs.
It said the number of customers (registered accounts) continued to grow steadily. Last year the number of new accounts grew by almost 30,000, an increase of seven per cent, to reach nearly 436,000 accounts.
PAEW has invested almost RO500mn over the last five years. In 2016, it invested more than RO85mn, a reduction of about three per cent from the previous year.
'We expect to continue to invest heavily but the reduction in government's revenues due to fall in oil prices has meant that we have to prioritise our investments. We are currently concentrating on investment projects which will secure access to water from the new desalination capacity, rather than rolling out distribution networks', PAEW said.
PAEW added that it is examining alternative financing routes for its projects as seen in the increased use of 'build own operate' contracts for small scale desalination.
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