Massive water tariff hikes predicted

Farmers should brace themselves for a hefty hike in water tariffs next year. The increase will help foot the bill of a massive budget shortfall for the upkeep and development of water resource infrastructure.

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South Africa needs to invest R573 billion in water infrastructure, services and demand management during the next 10 years. The country has budgeted for less than half this amount, government revealed during a recent press briefing in parliament. The chief operations officer at the Department of Water Affairs (DWA), Trevor Balzer, described this gap in funding as a “significant shortfall”, according to a report by the South African Press Association.

Balzer explained that only 44% of the projected R573 billion bill was budgeted for, leaving a shortfall of 56%. Minister of Water and Environmental Affairs, Edna Molewa, reportedly told journalists substantial funding was needed to meet the country’s growing demand for water. Above-inflation tariff increases to help fund the shortfall might apply from next year onwards.

The agricultural sector is responsible for about 62% of the proportional water use in South Africa. This is below the international norm of roughly 70%. The director of Agri SA’s natural resources committee, Nic Opperman, told Farmer’s Weekly that water tariff increases, usually announced in the first week of April, had not been announced for 2012/2013.

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He said that if DWA resorted to the massive tariff increases hinted at by the minister they would only come into effect next year (2013/2014), and were unlikely to have an impact on this year’s tariff increases. “Last year and this year we applied for a maximum increase of 10%, but the department can increase water tariffs by up to 50%,” said Opperman.