The drinking water and sanitation facilities minister will ask the Cabinet to increase consumer tap water prices, as part of a broader effort to improve the budget deficit.
“The Holding Company for Drinking Water and Sanitation suffers a daily deficit of LE18 million,” Minister Abdel Qawy Khalifa said. “Increasing the costs is pivotal.”
He also said the government plans to decrease energy subsidies, which have constituted major chunk of the state budget since the 1990s.
Official sources said Prime Minister Hesham Qandil has submitted a plan to President Mohamed Morsy, suggesting the government reduce subsidies for petroleum products by LE25.5 billion — the current total is LE70 billion — in the 2012/2013 fiscal year.
Economy experts say these measures accord with recommendations by the International Monetary Fund, with which the Egyptian government is negotiating a US$4.8 billion loan to help the state budget deficit, which stands at LE135 billion in the same fiscal year.
Selling the water to consumers at current subsidized prices costs the government LE750 million annually, and replacement and renovation costs for the water network are an additional LE650 million, Khalifa noted.
Khalifa said his ministry has already begun charging upper-class Egyptians for tap water at higher prices.
Over the past few months, the country has experienced problems with government-run water facilities, most notably when some 100 residents of Sansaft village were poisoned by drinking contaminated water. An investigation revealed that the government was aware that the water contained impurities, but did nothing to resolve the issue.
Edited translation from Al-Masry Al-Youm
