Ripping off the poor

2008-02-14 00:00

For five years the Msunduzi Municipality has been ripping off poor consumers. A poor household living in Sobantu, with six family members, bathing in a bowl and consuming 13 kilolitres (kl) of water a month, pay the same water tariff as a Montrose household with four family members, a pool and a large garden, consuming 33 kl.

Tariffs are overloaded at low volumes implicating affordability problems for poor consumers who subsidise the high-volume consumption of their richer counterparts. The municipality’s tariff structure is in contravention of national tariff regulations.

It has a two-block tariff structure: from zero to six kilolitres (zero or R4,94/kl) and plus six kilolitres (R9,75/kl). Households exceeding six kilolitres must pay for their “free water” (R29,45 for six kilolitres). With a mean consumption of 13 kilolitres most poor households receive no subsidisation benefit and must pay for their water at the “normal tariff”.

In short, water is too expensive at low volumes and too cheap at high volumes. Poor households struggle to pay for their water (the mean sum of R97,70), a stark indication of which is that tens of thousands of households have been handed over to the municipal debt collection consortia. High-volume users have no financial incentive to reduce their consumption but, importantly, no excess revenue is derived, therefore poor users cannot be sufficiently cross-subsidised and the economic cost of a scarce resource is not achieved.

Municipalities typically hide behind their so-called pro-poor policies such as indigent and free basic water policies. Households who should qualify as “indigent” are reluctant to sign up as the conditions of restriction washers and reduced amperage are so onerous.

Free water, guaranteed only to those desperate enough to be deemed indigent, is only assured for households consuming six kilolitres or less a month.

Every month the municipality issues around 61 500 municipal service bills to domestic homes. On this bill charges are levied for rates, electricity, refuse, sanitation and water. Some of these charges are volumetrically based (water and electricity), fixed and uniform (sanitation and refuse), or fixed and variable (amperage and rates e.g, the same amount charged every month but in relation to land and property value).

Although municipalities have ultimate discretionary powers regarding the setting of municipal water tariffs, they are expected to adhere to legislative injunctions, regulations and national tariff principles. Significantly, national regulations are well informed.

National tariff regulation decrees that municipalities should have at least three tariff blocks. This structure is informed by simple logic: the first block should be zero to six kilolitres and free, if possible; the second block should accommodate “normal consumption”, which can be anywhere between six and 20 kilolitres, and the third block should accommodate “luxury consumption”, that is, water that is not used sparingly or for pools and gardens, etc. This structure provides what is called a “rising block tariff”, that is, the more water you use, the more you pay.

Over a period of five years (2003-2008), Pietermaritzburg community groupings, advocating for a tariff change, have had numerous meetings with Department of Water Affairs and Forestry (Dwaf) ministers and parliamentary and departmental committees. To date such meetings have resulted in nought.

But this is all set to change. On February 16, the National Dwaf Regulation Unit will intervene in the Msunduzi water crisis. Dwaf has been under pressure to institute a regulatory framework as well as ensure that the mechanisms to give teeth to enforcement have been instituted. The municipality’s non-compliance situation has given Dwaf a primary case to test such enforcement protocol.

The regulation unit has at its disposal a case of clear-cut regulation non-compliance as well as information to back up the case and immense public pressure. In addition, all the relevant stakeholders — community groupings, the National Dwaf Regulation Unit, the regional KwaZulu-Natal Dwaf department, Msunduzi officials, and the South African Water caucus — will be in attendance. The timing of the meeting is of further significance as, first, new 2008/ 2009 tariff increases for water and all other services come into effect in July and, second, the National Water Services Regulation Strategy will, in the next couple of months, be sent to the minister for approval. The meeting will therefore have serious implications, not just for the Msunduzi Municipality but for all 70-82/237 local municipalities contravening National Tariff Regulations (2006/2007 Tariff Survey per Local Municipality).

• Julie Smith is from the Institute of Social and Economic Research at Rhodes University in Grahamstown.

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