Salga rejects proposed water tariffs, calls for independent regulator

The SA Local Government Association (Salga) has rejected proposed water tariff increases by water boards for 2020/21, except in the case of Rand Water.

Nine water boards appeared before the joint portfolio committee of water and sanitation as well as co-operative governance and traditional affairs (Cogta) on Tuesday night.

While Rand Water told the committee meeting that it proposed to raise water tariffs by 6.6%, Magalies Water proposed a 12% hike — the highest.

This had MPs wondering what formula was used if water boards could propose different tariff increases for the same service.

Salga rejected all proposed water tariffs with the exception of Rand Water and lamented that the free-for-all approach was created by the lack of an independent water regulator.

MPs agreed and said the establishment of an independent water regulator similar to the National Energy Regulator of SA (Nersa), which decides on electricity tariffs, was long overdue.

As things stand, there is no such regulator on water with water boards individually proposing different increases which are approved by the minister of water and sanitation.

MPs unanimously agreed that this system was unsustainable and should be done away with and an independent regulator set up.

Their reaction was based on the fact that most of the proposed increases were above inflation with some MPs expressing concerns that the proposed increases were coming at a time when water was a fundamental right to all owing to the Covid-19 pandemic.

The eight water boards whose proposed tariff increases were thrown out by Salga are:

• Amatola Water — 8.28%
• Bloem Water — 9%
• Lepelle Northern Water — 8.5%
• Magalies Water — 12%
• Mhlathuze Water — 9.37%
• Overberg Water — 8%
• Sedibeng Water — 7.5%
• Umgeni Water — 9.6%

Municipalities serviced by these water boards include eThekwini and Mangaung metros; Amathole district municipality, Polokwane; Rustenburg, uMhlathuze; Tweewaterkloof; Midvaal and Matjhabeng local municipalities.

Five of these municipalities had in the 2019-20 financial year upped their water tariffs by a rate lower than that of their water board, causing them financial disaster.

Thus, Salga concluded: “Salga advocates for a revision of tariffs by water boards considering the further constraint in ability of municipalities to service their water accounts while guaranteeing the consistent supply of the service.

“Overall, Salga has taken the position to accept only one water board tariff submission, that of Rand Water.”

MPs weighed in with the EFF’s Hlengiwe Mkhaliphi saying the water boards had to be “realistic” about their proposed tariff increases particularly in light of Covid-19.

“We are in the middle of Covid-19 and the reality is that many people will and have been affected such that they will not be able to pay for basic needs such as water,” said Mkhaliphi.

Mkhaliphi lauded Salga for rejecting the proposed tariff increases saying it was a mess that individual water boards had the liberty to determine their own tariff increases.

As such, there appeared to be lack of accountability on the part of water boards who seemed to not even consult residents who end up paying for water, an anomaly she believes is caused by the lack of an independent regulator.

The ANC’s Robert Mashego concurred with Mkhaliphi.

“As a matter of fact, chair, I know that Salga is the representative of local government. Why go to individual municipalities when there's a national organisation called Salga with a national mandate of all municipalities?”

Mashego also dismissed the one-for-all tariff increase of 9.9% proposed by the department of water saying it was short-sighted.

“Remember, if you give this percentage to water boards, municipalities must still put top-ups for their own operational needs which may lead to the end user paying about 15% to 20%, so I do not think we should agree with that,” said Mashego.

Deputy water minister David Mahlobo and representatives of water boards will return to parliament next Tuesday to respond to questions and comments from MPs.