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Municipal Bylaws and Water Tariffs for Selected Metros in South Africa – (2018-2019)

Municipalities have the constitutional competence to enact laws (known as by-laws) in respect of water and sanitation services.

The Department of Water Affairs and Forestry (DWAF), as it was known at the time, developed model water services by-laws for municipalities. The model by-laws included provisions to empower municipalities to prevent wasteful use of water, impose water restrictions, require large users to submit annual water audits, and specify standards relating to the quality of fittings. The by-laws contained general clauses relating to water efficiency, but left the specifics to the municipality to decide. Several municipalities

have developed water by-laws based on these model by-laws. Municipal by-laws also include provisions relating to the discharge of wastewater and industrial effluent to sewer. Such provisions may include the maximum discharge limits for various water

quality parameters, and the requirement for an industrial discharge permit. Wastewater that exceeds the water quality limits may incur

surcharges, or denial of a permit to discharge to sewer.

3.2.1. Water restrictions

The national Department of Water and Sanitation (DWS) is responsible for imposing restrictions on different user categories in catchments facing water supply constraints. Municipalities then pass these restrictions on to their water users. Restriction levels impose volume limits, time limitations, and bans on certain types of water use in order to decrease demand during periods of water insecurity. Restriction levels and their requirements vary from municipality to municipality. Most municipalities have up to five restriction levels – the higher the restriction level, the greater the limitations imposed. Water restrictions are currently in place in most of the municipalities in the Western Cape. Up-to-date information can be found on the Western Cape Government website.

3.2.2. Water tariffs

Municipalities either purchase untreated raw water taken directly from dams, springs, rivers and boreholes, or purchase bulk water that is

usually treated to a potable standard from bulk water providers, e.g. Water Boards. The CoCT and other municipalities in the WCWSS purchase raw water from DWS-owned dams and then treat the water in municipality-owned facilities. In 2015/16, raw water charges (which include water management and infrastructure charges, and a water research fund levy) averaged R1.98/kl nationally (DWS 2017a). The bulk water tariffs averaged R7.44/kl, varying from R4.18/kl to R15.86/ kl. The tariff would depend on various factors, such as the availability of water, water quality and distance of distribution (DWS 2017a). Municipalities then distribute potable water to their consumers and charge a retail tariff. Revenue from water sales accounts for around 13% of municipal operating revenue (DWS 2017a). Each municipality is responsible for setting its own tariffs, in terms of which it may differentiate between users. In general, most municipalities have separate tariffs for residential, commercial and industrial water users, and will provide a free basic allowance of water to indigent households. In South Africa, around 56% of households do not pay for water and sanitation services (in 2015), because they are either unable (indigent) or unwilling to do so (StatsSA 2016a).

Municipalities generally use a rising block (stepped) tariff structure, where R/kl tariffs increase as usage increases. However, in some cases a fixed volumetric rate (R/kl) applies, e.g. CoCT’s commercial and industrial water and sanitation tariffs. In addition, the tariffs are often linked to restriction levels, with tariffs increasing as restrictions increase. Table 2 and Table 3 outline the water and sanitation tariffs (excluding fixed charges and surcharges) for various metros

under minimum restriction levels13. CoCT’s tariffs for Level 5 (L5) restrictions are included for comparison with their Level 1 (L1, minimum restrictions) tariffs. Sanitation charges are often based on an assumed discharge rate that is linked to water consumption. For example, in Cape Town the residential sewage volumes are by default assumed to be 70% of the water consumed. Table 4 outlines the default percentages applied in each metro. For the latest tariffs, refer to the metro websites.

The tariffs are also linked to the principle of cost 15 recovery of water provision. As municipalities diversify their water supplies to include more expensive water sources, such as seawater desalination, the additional costs will have to be recovered through increased tariffs.

Consequently, water tariffs are set to continue to increase in the future. Figure 23 shows that CoCT’s water tariffs are on an upward trend,

and their planned water augmentation projects will likely drive further tariff increases.

CoCT’s future water tariffs are expected to become more predicTable over the next 2-3 years.

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