OPEN­ING THE TAP MAY SOON COST YOU 65% MORE

CityPress - - Business -

Wa­ter tar­iffs will, on av­er­age, rise by 65%, and some ir­ri­ga­tion farm­ers will have to pay as much as 2 578% more for wa­ter if the depart­ment of wa­ter and san­i­ta­tion’s new pric­ing strat­egy is ac­cepted.

The strat­egy is still open for com­ment for the next three weeks. Ac­cord­ing to a no­tice in the Govern­ment Gazette, a tar­iff ad­just­ment is nec­es­sary to re­coup the full costs of wa­ter use from con­sumers. They must pay for wa­ter man­age­ment costs, in­fra­struc­ture main­te­nance, a pro­jected eco­nomic reg­u­la­tor for wa­ter, the wa­ter re­search com­mis­sion and waste wa­ter man­age­ment. The pol­icy em­pha­sises that wa­ter tar­iffs should re­flect the wa­ter short­age in the coun­try and dis­cour­age wastage.

The depart­ment’s eco­nomic im­pact study in­di­cates how the pol­icy will af­fect wa­ter users. Cur­rent tar­iffs for un­pro­cessed wa­ter vary widely for dif­fer­ent users and in dif­fer­ent ar­eas, and the pol­icy is try­ing to cor­rect th­ese im­bal­ances. Af­ford­able wa­ter must be pro­vided to “black peo­ple, peo­ple in re­mote ar­eas, women and the poor” with­out plac­ing Trea­sury un­der more pres­sure.

The depart­ment, how­ever, does not fore­see a dev­as­tat­ing ef­fect on the econ­omy de­spite busi­nesses and house­holds hav­ing to pay more, be­cause wa­ter ex­penses make up a rel­a­tively small part of their ex­penses.

A hy­brid cost model – in which some costs will be de­ter­mined at na­tional level, while oth­ers will be levied by wa­ter pu­ri­fiers and mu­nic­i­pal­i­ties – makes it dif­fi­cult to pre­dict by ex­actly how much wa­ter prices are likely to in­crease.

An­other pol­icy change that will af­fect in­dus­try in par­tic­u­lar is a pro­posed move away from wa­ter ex­trac­tion rights and the phas­ing in of a sys­tem of manda­tory mea­sure­ment to de­ter­mine ac­tual use in­stead of reg­is­tered use.

Farm­ers who ir­ri­gate could pay “nearly three times more” for wa­ter, ac­cord­ing to the im­pact study, but in some ar­eas the in­crease could be as high as 2 578%. The study’s au­thors as­sumed farm­ers would be able to pass on all their in­creased costs to con­sumers and the ef­fect for them would in any case be min­i­mal, as wa­ter makes up a small part of farm­ers’ in­put costs.

How­ever, Nic Op­per­man, di­rec­tor of nat­u­ral re­sources at AgriSA, dif­fered. He said the cost of elec­tric­ity had also risen sharply and he ac­cused the state of not do­ing enough to help farm­ers in a time of cri­sis for agri­cul­ture. AgriSA is pre­par­ing its pre­sen­ta­tion in the hope of a more favourable pol­icy out­come.

The new pol­icy must come into ef­fect from April 1 and tar­iffs will be de­ter­mined there­after at three-yearly in­ter­vals.

Scholtz

– Her­man

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