Water use pricing and financing of water infrastructure systems in South Africa

The water infrastructure value chain is hierarchical in South Africa, i.e. national, provincial and local government, based on administrative and political boundaries. Differential water use pricing recognises neither the full replacement nor full recovery costs. The mean water use charge for all the Water Management Areas (water basins or catchments) was US$0.185/m3 (SD = ±0.09), agriculture (irrigation) 20%. The mean annual bulk treated water use tariff was US$0.315/m3 (SD = ±0.242) and increases varied significantly, i.e. 14.33% (SD = ±20.57). The national mean domestic water use tariffs varied from US$0.238/m3 (SD = ±0.310) to US$0.988/m3 (SD = ±0.450) for the pre-determined water use blocks and increased between 13.6% (SD = ±7.7) to 16.9% (SD = ±0.4). Rural municipalities charged ca. 10% below the equivalent water use tariffs than urban areas. Commercial and industrial water use tariffs were higher than the domestic water use tariffs in the lower blocks and in line in the higher water use blocks, i.e. ca. 178.68% (SD = ±256.99). The water use multipliers varied substantially between 3 and 15, i.e. from raw water to municipal retail.