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» 02.07.2010 - World Cup "good investment" for SA
» 24.05.2010 - SA road network at "crisis point"
» 09.04.2010 - US$3.75 billion loan for SA energy sector
» 23.03.2010 - World Cup business frustration hits SA taxis
» 17.03.2010 - Sweden to help SA develop clean energy
» 03.03.2010 - More black-outs for SA after World Cup
» 04.02.2010 - Tarring scenic Lesotho-SA mountain pass causes protest

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South Africa
Economy - Development | Society

Water tariffs to rise in South Africa

afrol News, 2 February - Water tariffs are to rise at least 6 percent in many parts of South Africa, following the drought in the region. The government has announced tariff increases for bulk raw water supplied from Lesotho's Katse Dam and the Vaal and Sterkfontein dams in South Africa. Water companies now follow paste.

The South African Department of Water Affairs and Forestry last week announced tariff increases of 6.1 percent for bulk raw water supplied from two national dams and for water imported from Lesotho.

The affected dams supply some 12 million people in provinces of Gauteng (including Johannesburg), Mpumalanga, the Free State and North West. These are also the regions most affected by the worst drought in decades to strike South Africa.

Johannesburg Water - a water utility is owned by the city council - now informs that it had no choice but to pass on the tariff increase to consumers. The utility had received note of higher prices from its supplier, the private company Rand Water, which in turn had to pay more from the dams' operators.

According to Rand Water, the level in most of the region's dams has been hovering below 50 percent since the dry spell set in last year. Also in Lesotho, a major supplier of bulk raw water to the industrialised zone around Johannesburg, the regional drought has made a heavy impact.

The rise in water tariffs in South Africa has caused concern among consumers as the commercialisation of water utilities in the country already has made clean water unaffordable to many poor households. Poverty and high water tariffs have been blamed for the 2001 cholera epidemic in Johannesburg as many poor household were disconnected from water supply after failing to pay for the service.

Johannesburg Water however holds that the company maintains a pro-poor profile as it supplies the first 6000 litres free to every household. Only water consumption over this limit is charged by the city-owned company.

The Johannesburg water utility however warned that the tariff increase to local consumers might be significantly higher than the 6 percent increase charged by Rand Water. This was because the company expected a rand 400 million loss this year, due to low tariffs on small water consumers. Johannesburg Water urged the city council to subsidise the utility if it wanted to avoid significantly higher tariffs.

The city's water utility has been the focus of globalisation critics after it was established in January 2001 as an independent company. While the city of Johannesburg is the company's sole shareholder, Johannesburg Water is under administration of multinational water companies such as Suez Lyonnaise. Prior to the establishment of the company, water supply services were commercialised, leading to the exclusion of many poor households, anti-globalisation groups hold.

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