Surkhet Valley Water Supply Users’ Organization (SVWSUO) Water Tariff and Cost Review Update

Photo credit: WASH-FIN; Caption: SVWSUO customers queuing up to pay their utility bill.

In Nepal, WASH-FIN engages with partners to develop viable models for decentralized WASH service delivery. In 2018, WASH-FIN supported the Surkhet Valley Water Supply Users’ Organization (SVWSUO) in conducting a review of the utility’s technical, commercial and financial indicators. The review also included an analysis of national water utility cost data and performance benchmarks. This analysis was used to evaluate the tariff structure in terms of cost recovery, financial viability, efficiency and social equity, and SVWSUO made an adjustment.

In 2019, WASH-FIN supported SVWSUO in developing its five-year business plan, which includes new capital investment projects to improve service delivery. This provided a basis to evaluate costs and revenue since the first review and update the tariff accordingly. This report is the updated cost and tariff review; it builds on the prior analysis and considers the business plan capital projects. Following the same methodology, the review recommends a tariff adjustment to ensure that revenue will cover all costs, including debt service on blended finance from the Town Development Fund. This report is also intended to provide guidance to SVWSUO for future adjustments to maintain cost-reflective tariffs, as well as serve as a reference for other water utilities and sector stakeholders in Nepal. The tariff review and the business plan were presented at a national workshop in early 2020