Unpacking raw water pricing in Zim

RAW water pricing in Zimbabwe has been a subject for distortion for a very long time. Many people from various sectors such as farmer organisations, Parliament, local authorities and business persons have been quoted extensively as saying the price of raw water in Zimbabwe is too high and unviable for business competitiveness.

However, nothing can be further from the truth. Raw water prices in Zimbabwe remain very reasonable compared to other countries in the region.

The Zimbabwe National Water Authority, being the Government’s lead agency in water resources management, comes up with raw water tariffs that are approved by the Minister of Environment, Water and Climate.

A look at the history of raw water tariffs since the inception of the multicurrency regime show that Zinwa has been understanding and responsive to the concerns of raw water users by constantly reviewing them downwards despite the tariffs being way below what other countries in the region charge.

The recent downward revision of the tariffs was done in December, 2015 and the tariffs announced during the period, through the National Budget Statement and subsequently through Statutory Instrument 48 of 2016 are still applicable.

The new tariffs saw the price for raw water being charged on A2 farmers going down to $5 per megalitre or 1 million litres of untreated water.

This amount translates to $1 per 1 000 drums of raw water. A1 farmers now pay $3 per megalitre or 5 000 drums of untreated water or 1 million litres of raw water.

Communal farmers are required to pay $2 per megalitre of water or 1 million litres of raw water. This means that for a dollar, the communal farmer can get 2 500 drums of raw water since a megalitre is 5 000 drums.

Local authorities pay $6 per megalitre or 5 000 drums of water while mines pay $50 for the same amount. This means local authorities get 2 500 drums of water for $3.

Agriucltural estates such as the sugar cane estates in the Lowveld pay $12 per megalitre or 1 million litres of water. This effectively means the agricultural estates pay $6 for 2 500 drums of water or $1 for more than 40 drums of raw water.

These tariffs are blend tariffs meaning they are applicable to all raw water users using water from Zinwa managed dams anywhere in the country.

The use of the blend pricing model for raw water is in stark contrast to other jurisdictions such as South Africa which use the scheme-specific model which has seen some raw water consumers in the country paying as high as $72 for a megalitre of water.

The use of the blend price has been deliberately adopted to ensure equity and improved water access by all Zimbabweans regardless of where they are stationed.

This has been out of the realisation of the strategic and important role water plays in the social and economic development of Zimbabwe whose economy is largely reliant on sectors such as agriculture and mining.

These tariffs are also crafted in a manner that allows Zinwa to execute its mandate of providing water to the nation in a cost effective manner, at the same time allowing the Authority to also make strategic returns on the water infrastructure across the country.

The realisation of some return on the water infrastructure is a key component of the Integrated Water Resources Management (IWRM) which recognises water as both a social and economic good.

IWRM also recognises the user pays principle, meaning water users should also pay for the service they receive. It is against this background that all raw water users should pay for their water use once their bills fall due.

Most users are now saddled with huge debts because they have not been paying for their water for years hence the perception that water is expensive.

It must also be put on record that the Water Act and its related statutory instruments require that anyone using water from a Zinwa managed dam should do that in terms of a water abstraction agreement and failure to do so constitutes a criminal offence punishable by imprisonment, a fine or both.