Water tariffs lead to over-recovery

THE CITY collected almost R1 billion in over-recovery as a result of its punitive water tariffs last year.

And if the City was laughing all the way to the bank, then this year its coffers will be bursting at the seams. Conservative projections indicate that for this financial year the over-recovery based on the increased water tariffs will be almost R2.1 billion.

This astronomical figure is primarily caused by two factors. First, the punitive water tariffs and second, the reluctance of the City to swiftly reduce the daily dispensing of 280 000 water management devices from 87 litres to 50 litres.

Councillor Xanthea Limberg reported that 60% of its 1.1 million households pay for water. The other 40% receive free water.

Last year, residents paid R4 a kilolitre of water for the first 10.5 kilolitres. This translates to an annual revenue collected by the City of approximately R333 million, assuming all residents stay within the requested 10.5kl consumption threshold a month.

If we assume the City reduced dispensing of 30% of the 660 000 (=1.1 million *60%) water-paying households from 87 litres to 50 litres a day, then the households with reduced dispensing will generate revenue of approximately R412 million to the City’s coffers for this financial year.

The remaining 70% of water-paying households will still be consuming 87 litres a day or 10.5kl a month and will be paying R28.9 a kilolitre for the first 6kl and R46 a kilolitre for the balance of 4.5kl per month.

For this year, it is projected that the City will collect a total amount of approximately R2.5 billion from water. The over-recovery compared to last year will be approximately R2.1 billion.