Why it is necessary to hike water tariffs
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The reality of drought is that we need to invest in other water sources due to low and unreliable rainfall. Failure to do so would expose residents to the massive socio-economic risks attached to running out of water.
Through an incredible team effort to reduce usage, Capetonians have made it through the summer of 2017/18 and the winter rains are upon us. But we are by no means out of danger. Augmenting supply involves a considerable increase in costs at the same time as the City is experiencing a dramatic reduction in revenue due to the substantial drop in the volume of water sales.
Furthermore, a kilolitre of augmented water costs significantly more (R7-R18) than a kilolitre of treated rain water (R5-R7). Therefore, the City has no option but to increase tariffs.
Constitutionally, the responsibility and budget for ensuring a reliable water supply to all urban areas resides with the Department of Water and Sanitation. It should not fall so heavily on the DA to augment water supply in Cape Town. But it does. This is the reality. And we’re very much in touch with it.
The City does not make a profit on the sale of water, but it must recover the full cost to balance its budget. The reality is that water tariffs have historically been too low. The new tariff structure reflects the true cost of water delivery.
If rainfall is good, restrictions can be reduced, and tariffs at the lower levels will drop.
The old tariff structure is not compatible with a drought situation, because all water sold below 10.5 kilolitres per month per household has been heavily subsidised by those households using over 10.5 kilolitres per month. But now almost all households are using below 10.5 kilolitres per month leaving no revenue for cross-subsidisation, while indigent households still need to be fully supported.
The reason for a fixed charge component is to guarantee a minimum level of income no matter the volume of water sold. This is because the cost of operating, repairing and maintaining water and sanitation networks does not decrease in proportion to the amount of usage. Even at low volumes, the same programmes are necessary to keep water and sewerage flowing reliably. These realities are reflected in our proposed new tariff structure.
* Mmusi Maimane, leader of the Democratic Alliance.
** The views expressed here are not necessarily those of Independent Media.