Are Western Cape municipalities profiteering off the drought?

Is the City of Cape Town‚ among other municipalities‚ coining it amid the crippling drought? According to the Western Cape financial performance report of municipalities in the first quarter of the 2017/18 financial year‚ the city has billed ratepayers for R835-million‚ against its R642-million expenditure.

This means the city‚ over this period‚ could rake in R193-million.

The report further estimates that by the end of the current financial year‚ it may collect over R897-million.

It is not clear if the amount is an increase from the previous year. However‚ late last year‚ the city had reported increased water revenue‚ because residents who had failed to comply with restrictions were charged more.

And as of July 1‚ the city had also stopped providing free water. Previously‚ the first six kilolitres per month were provided to all residents free‚ but now only indigent households qualify for the benefit.

In addition‚ the city has seen a massive cut in water use by residents‚ amid tougher water restrictions. In the last council meeting at the end of October‚ the city said that consumption had dropped to 585-million litres of collective use per day‚ from pre-restriction consumption levels of 1.1-billion litres per day.

Cape Town is not alone. Three other Western Cape municipalities – Drakenstein‚ George and Stellenbosch – are also looking to collect a tidy sum from water.

Collectively‚ the municipalities have billed over R149-million‚ versus an expenditure of over R38-million.

This means that they are looking at a surplus of R111-million‚ should they collect all the billed amounts.

Cape Town's mayoral committee member responsible for water and sanitation‚ Xanthea Limberg‚ cautioned that the city was not making profits from water.

“There is a difference between billed and collection. So you might bill someone for a service‚ but might not recover the full cost‚ because they haven’t paid you. So even though the billed amount might seem excessive‚ the collection rate might indicate that we… didn’t collect that full [amount]‚” said Limberg.

She said the collection rate had gone down.

Last year‚ the City’s collection rate was around 80%‚ but it had dropped following the introduction of Level 4 water restrictions.

Limberg explained that the municipality “spends 90% of its budget” on delivering a high-quality standard of drinking water.