iol GAYE DAVIS
Higher water charges are on the cards. Water Affairs Minister Edna Molewa said on Monday the cost of water would probably rise at a rate higher than inflation.
That’s because there is a funding shortfall of 56 percent in the more than half a trillion rand needed to pay for water infrastructure, services, conservation and demand management over the next 10 years.
A long-term investment plan drawn up by the Department of Water Affairs puts the overall cost at R573 billion, over the next decade, for the “total water value chain”.
Chief operations officer Trevor Balzer said that according to their estimates, only 44 percent of this would be funded – resulting in a significant shortfall.
He broke down the R573bn price tag as follows:
* R394bn for water services (municipalities, pipelines);
* R162bn for water resources infrastructure; and
* R16bn for water conservation and demand management (including dealing with “unaccounted” water lost through leaks).
“If we look at current budget allocations, taking into account all grant-funded programmes put in place by the national treasury as well, we estimate over 10 years that 44 percent of that is budgeted for,” Balzer said. This left a shortfall of 56 percent.
“We’ve really got to ramp up to be able to meet that target,” he said.
Asked whether price rises would outstrip inflation, Molewa answered: “Probably.”
“It’s very clear that we’re going to (need) a lot of money… it goes without saying that the cost (of borrowing) is likely to be very high and thus charges, also.” Continue reading