Water and Sanitation consults on raw water pricing strategy

The Department of Water and Sanitation (DWS) says the final decision on raw water tariff increases will be taken by Minister Lindiwe Sisulu, once all inputs have been considered.

The department recently held consultations with various water users in the country, as per the requirements of the National Water Act’s legislative process on the proposed raw water use charges for the 2021/22 financial year.

The consultations were done through virtual meetings, physical meetings, and emails.

In terms of the National Water Act of 1998, the department is required to establish an annual raw water pricing strategy after consulting widely with different water users, including mines, industries, agriculture, energy, and domestic users.

Department spokesperson, Sputnik Ratau, explained that in terms of the capital unit charge, tariffs will be set to ensure that the debt is fully paid by the end-user within a reasonable time period (not longer than the life of the asset), after considering affordability and future augmentation of the scheme.

“It is also envisaged that the debt will not overlap unreasonably to another project, thus causing financial strain on that project. The capital unit charges may be phased in during the construction period and interest will generally not be capitalized after completion of the construction,” Ratau said.

Ratau said the proposed raw water charges for water resource infrastructure in domestic and industrial use envisage an annual increase limited to the Producer Price Index (1.2% in April), plus 10% up until the target for development charge is achieved on Government Water Systems.

“Tariff increases range from 0% to 11.2% in agriculture irrigation charges; the depreciation charge will be capped at 1.5c per cubic metres at PPI (April 1.2%). Operation and maintenance cost increases will be limited to 50% a year,” Ratau said. – SAnews.gov.za

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