Applying water tariffs reflecting cost of water

Developing cost-recovery water supply systems
Pursuant to the recognition of water as a social and economic good, the various available options for charging water users (including domestic, urban, industrial and agricultural water-user groups) have to be further evaluated and field-tested.
This strategy features in the framework of Agenda 21 as formulated at UNCED (Rio de Janeiro, 1992), now coordinated by the United Nations Commission on Sustainable Development and implemented through national and local authorities. Agenda 21 recommends that, taking into account the circumstances in each country and where affordable, water tariffs should be introduced that reflect the marginal and opportunity cost of water, especially for productive activities. It also recommends that field studies on willingness to pay should be conducted in rural and urban situations.

A 'willingness and ability to pay for water survey' conducted in some of the informal settlements of Johannesburg found, contrary to expectations, a widespread acceptance that water is not a free good and that payment is necessary. Practically, however, this is mediated by broader political issues which make a translation from the personal acceptance of the validity of payments to the actual occurrence of payments far from simple. A lengthy culture of rent and service boycotts as a political strategy, combined with poor quality of service, slow delivery and a residual suspicion of city managers, has led to a seemingly anomalous situation. The survey found an almost 100 per cent agreement that payment for water supplies was necessary, alongside actual payment levels of between 5 and 30 percent.

In the field of water, free services for all have generally resulted in some service for a few and little or none for most. However, cost-recovery policies are controversial. Whilst water should not be provided free-of-charge, there may be a proportion of households which are unable to afford even a minimal payment for water. A recognition of the right to adequate water supply for even the most destitute places the onus on water supply authorities to derive an equitable, yet financially sustainable, tariff system which balances sometimes contradictory goals: the need to redress previously inequitable resource allocations; to maintain the financial viability of water supply systems; and to ensure that the poorest have at least a supply of water adequate to maintain their health and an acceptable standard of living. Political and attitudinal obstacles may need to be removed first. Income policies should not be forgotten either.
Purchasing, supplying
Type Classification:
E: Emanations of other strategies