Plan may see poor paying more for water
Water has no price. Deprived of water for long enough, you'd give everything – literally – for a sip to save your life. For some, "everything" is the wealth of nations; others have nothing material to give.
The government is looking again at water pricing, particularly for the bulk users – industry, agriculture and municipalities. Water is too cheap at present, it says, and because of this we use too much and are wasteful. This is quite probably true at a bulk level, certainly for industrial water users. But as we look at domestic water things get a little more complex.
Municipalities pay a flat rate for water – each litre costs the same. They then charge consumers a rate based on a rising-step tariff, where each litre of water costs a different amount, depending on how much you use. At least three tariff tiers are required: the first step is free (at least for "indigent" households); the last step is the most expensive.
In many places, including Cape Town, there are many more tiers, which allows for a more sophisticated pricing strategy. The lessons gleaned here apply to municipalities around the country.
With enough water to drink, what each person is willing to pay for water differs. The R27.50 you paid for this Mail & Guardian is more than 70% of what your fellow South Africans have to live on each day. It is within this context of vast inequality that municipalities must design their tariff systems. When deciding how much to charge for water, municipalities must also think about human dignity and health, the "public good", how they will cover the costs of buying and treating water and getting it to people, water scarcity and future water supply. Setting a price for water is complex.
What's more, water is a source of revenue for municipalities, many of which have empty coffers.
At a domestic level, water consumption increases with both household income (wealth) and property size. Those whose water consumption is limited to the lowest pricing tiers are primarily poor and living on small properties. They are not lavish water users with multiple bathrooms, swimming pools or large, irrigated gardens. Rising food, electricity and transport costs combined with low or nonexistent wages means that this is the group that should be targeted for below-inflation tariff increases.
Yet in Cape Town this year, the proposed price increase for the second tier – those using six to 10.5 kilolitres of water a month – is more than 30%, while for all other tiers it is less than 10%. In 2010 this skewed price increase was even more severe. In the scenario of water scarcity, in which the city aims to reduce water consumption by 30%, those using 10 kilolitres of water a month would pay 10% more in 2010/2011 than they did in 2009/2010, whereas those using 50 kilolitres a month would pay a staggering 45% less. This "flattening" of the tariff curve is, in essence, a transfer from poor to rich.
The city argues that these tariff changes are to "reduce the level of subsidisation". In other words, it says that, at present, high water consumers (generally richer people) are paying too much to "subsidise" those using very small amounts of water (generally poorer people).
But think about it: within cities, water services are unequally provided – many people in poor areas survive with a single tap and an outside toilet; household plumbing is shoddy and fixing municipal leaks, including leaking sewerage, can take months. Yet the tariffs being paid are the same. It is only by using less water that you are able to save money, which means that some households "choose" to use less water than they would need if they wanted to remain healthy.
The level of water services people receive is a symbol of class and contributes to the shame or sense of entitlement they feel, depending where they fit on the spectrum. This entrenchment and deepening of inequality is a social time bomb, as evidenced by rising levels of anger over a lack of service delivery.
Water pricing can play its part in redressing this. Rich municipalities, such as Cape Town, should maintain progressive tariff curves, since it is easier to keep them in place than to introduce them; and they should stop pandering to the 10% of South Africans who are rich.
Water pricing needs to be part of an integrated strategy that addresses inequality and ensures sufficient, affordable water for all.
Jessica Wilson manages the water and climate change programme at the Environmental Monitoring Group, a Cape Town-based nongovernmental organisation. SAfm and WWF's national dialogue on the price of water takes place on May 24