Abstract:
It is generally accepted that the provision of safe water is a major factor behind
the improvement of living conditions and economic development. Islamabad is
facing increasing water shortages; the present water supply is not sufficient to
bare future requirements to support the healthy living of the present population.
Therefore to solve this problem it is necessary to complete new water supply
schemes before this problem become severe.
Water supply from shah Allah Ditta Reservoir to Islamabad is one
of the project that will solve present as well as future water requirements of
Islamabad. The planning horizon adopted for the study is the year 2030. The
projection of future population and water demand has been calculated up to the
planning horizon. The basis of cost estimate is previous project rates (Rawalpindi
Urban Water Supply and Sanitation Project) that were Asian Development Bank
funded.
The cost of water per 1000 gallons including capital cost and O&M cost at
10% discount rate comes out to Rs 14.57. Which is Rs 6.57 more than the
prevailing average tariff ofRs 8. Expected profit of the project for ten years after
normal capacity is reached (at proposed tariff of Rs. 16 per 1000 gallons) comes
to Rs. 482.33 million . The revenue per 1000 gallon at prevailing tariff rate is Rs.
8.00 and at proposed tariff is Rs 16.
As regards risks of cost overrun or revenue shortfall they have been analyzed in
sensitivity analysis.
According to WTP survey conducted in the beneficiary area, the
beneficiaries in the area are on average willing to pay Rs.2.20 per 1 OOOliter
(Rs.9.98 per IOOOgal). It is assumed that their willingness to pay will grow in
future in parallel with the growth of their income.
Benefits derived from the project are
i) More area served.
ii) Continuous availability of water to the consumer.
iii) Improved quality oflife.
iv) Reduction in water borne diseases.
