The City of Cape Town has topped a global listing for the largest water tariff increases in 2018.
According to the white paper titled The Global Value of Water, the city has seen a 390% increase in the benchmark price of water and wastewater services.
The paper, which was published by GWI in partnership with Arup and The Global Water Leaders Group (GWLG), documents how Cape Town’s tariff hike aimed to penalise households using more than 6m3/month as water levels in the dams serving the city fell below 35%.
While the measure helped cut peak water usage in the city by 54% and Day Zero was delayed, the government is expected to adjust tariffs downwards with dams refiling.
Global average on the rise
Globally the average price of water and wastewater rose by 3.8% to $2.04, held down by price cuts in Northern Europe and cities in Africa and the Middle East choosing not to increase rates.
Christopher Gasson, Publisher of Global Water Intelligence says the global average price of water needs to at least double if everyone is going to get reliably potable water in the long term.
“These increases matter because they attract much needed investment into the sector and they encourage better use of resources.”
Reducing the impact on low income households
“We are also seeing utilities becoming more active in offering social tariffs to reduce the impact on low income households.
“Most tariffs are volumetric, but we are seeing a trend towards higher fixed elements of water and wastewater bills. It reflects the fact that for most utilities 80% of the costs are fixed, and in older cities with falling water demand, there are few alternatives,” he concludes.