In a letter to additional chief secretary of the Urban Development Department, Municipal Commissioner G R Aloria has stated that it would not be possible for the VMC to pay the yearly increase of Rs 3 crore by the Government in form of charges.

Aloria has mentioned that when the agreement was reached among the VMC, the Government, the GSFC, IOC and the Gujarat Refinery that if the beneficiaries paid up 50 per cent of the capital expenses then the Government would not ask for the charges.

He has further stated that out of the Rs 9.3 crore to be shared by all the beneficiaries, the VMC has paid Rs 3.05 crore and that there are no pending dues. The beneficiaries were supposed to pay only maintenance charges.

During the Shankersinh Vaghela's regime, the Government had written letter to the VMC stating that the agreement had been cancelled and that the charges have been revised.

The civic body then pursued the matter with the State Government and undertook necessary formality of signing the agreement. At a meeting with Major Irrigation Minister Jaynarayan Vyas on November 13, 1998, the VMC was assured that the agreement would continue and the rates would not be revised.

The civic body was also asked to take up the matter through the Urban Development Department.

Aloria has further mentioned that a major chunk of water is used for domestic consumption. He has also stated that in the last four years the VMC has incurred a loss of around Rs 24 crore for supplying water to the citizens.