Management of water to meet our Needs

Cross-subsidisation - a positive response to meeting basic Water and Sanitation Needs

Introduction

Water needs to be viewed as a national, regional and international
resource and planned for as such. Given the fact that water is not
affordable for many people, it is necessary to find ways of providing a
lifeline supply.

Affordability

Funding a water lifeline is possible if a number of strategies and
mechanisms are put in place. The World Bank, private companies and some
governments from developing countries have promoted the notion that
people must pay the actual operating and management costs
(cost-recovery) related to providing water services. Experience has
shown all over the world that people do not have sufficient income to
pay for water at cost-recovery prices. Until now, governments had
provided water at subsidised rates or even for free. Water riots have
occurred in countries like Bolivia and South Africa. People have been
evicted form their homes or their water has been cut due to the
inability to pay for water. These kinds of actions by governments
violate the internationally recognised human right to water. But the
poor are often victims of funding mechanisms that penalise them and
favour the rich and powerful. Lets look at how water is consumed in
South Africa and then consider how it can be paid for.

The argument for cross-subsidisation

There are numerous potential sources of income from within the water
sector to cover the operating and maintenance costs of an improved
level of service with a basic entitlement provided for free. These
include cross-subsidisation from rich to poor consumers, from mining
and industry to residential users, and from urban to dense settlement
and rural areas.

Cross-subsidisation is about finding ways of charging for water that
allows for a lifeline supply to those who cannot afford it and charging
a higher rate to those who can afford to pay more and who use more. If
the commercial and industrial sector pay a higher premium for water
then this also contributes to cross subsidisation of the infrastructure
and operating and maintenance costs.

From the above graphic we can see that most of the fresh water in South
Africa is consumed by mining, industry and agriculture. As much as half
of the water used by agriculture is wasted due to poor irrigation
methods. Water for drinking, washing, cooking and cleaning only makes
up 10% of water used. Thus, companies that make profit and become rich
are us(abusing) almost all the water. Besides, governments spend
billions on proving infrastructure, research and huge administrative
systems to manage water- all paid by the taxes of citizens. In reality,
this constitutes a subsidy for the rich! The poor subsidises the rich.
This is the kind of government spending that is similar throughout the
world.

The decision by governments to impose a system of cost-recovery on its
poor citizens is nothing more than an injustice. The rich must be taxed
for consuming and abusing our life giving resource - water.