When what goes up never comes down

In my view the most interesting information that formed part of the Cape Chamber of Commerce and Industry’s objection to the proposed drought levy, wasn’t that the City’s focus was on using water and electricity as a cash cow, but, since 2009 they have been charging ratepayers for water far above the inflation rate.

It’s no surprise then that so many of us are battling to pay our rates bill. The drought levy may be scrapped but the City is going to find another way to hammer us: by increasing the water tariffs astronomically. It’s easier to target law-abiding citizens than it is to find creative ways of trimming the budget.

We all know once something goes up it never comes down.

President of the chamber, Janine Myburgh, noted in her submission, that during the past decade there have been regular above inflation increases in the City’s property rates and tariffs despite the improved efficiencies offered by modern technology.

“In 2009 the official CPI increased by 7.1% while the water tariff increased by 11.7%; in 2010 CPI was 4.3% but water tariffs increased by 10%; in 2011 the CPI was 5% and water increased by 8.28%; in 2012 the CPI was 5.6%, water increased by 15.08%; in 2013 CPI was 5.7% and water increased by 11.28%, in 2014 the CPI was 6.1%, water increased by 9.53%; in 2015 when the CPI was 4.6%, water increased by 11% and in 2016 the CPI was 6.8%, water increased by 9.75%,” Ms Myburgh noted.

The CPI (Consumer Price Index) is used to measure inflation based on a basket of goods that South Africans buy.

“Cape Town had little incentive to ensure that water was used efficiently mainly because it has been using water and electricity as trading enterprises which produced half the city’s revenue and underpinned its cash flow,” she said.

The City has hired a communications company to manage the crisis.

Chairman of the board is Tony Leon, former leader of the Democratic Alliance, with Nick Clelland-Stokes, a DA strategist and the chief executive of Resolve Communication, running interference.

Officials won’t say how much the campaign cost, however, it is understood that Resolve Communications is being paid
R650 000 to manage the crisis. Well, they’ve managed to raise the ire of residents, that’s for sure.

But back to Ms Myburgh: “The main focus has been on the sale of water and the more the City sold the more satisfied it was with its performance. The reuse of water was not regarded as a priority. The main beneficiaries of water reuse were golf courses. When Anglo American bought Steenberg farm from the Louws, they arranged for a supply of treated water from the Cape Flats sewage works. The Westlake Golf Club joined in and the two golf courses were well watered with excess water being used to develop the Steenberg vineyards and it continues.”

The chamber has often asked the City to increase its water recycling efforts. The Athlone treatment works is surrounded by major industrial areas and the airport. There is considerable scope to reuse water. Ten million passengers a year pass through the airport and many thousands of hired cars and others are washed there every day with sweet dam water.

“There are no plans or targets for the increased use of recycled water. The potential is enormous. Israel, for instance, reuses 85% of its water, mostly for agriculture. It seems the City’s water plans have been driven by the revenue potential rather than the more productive, efficient use of a scarce commodity,” Ms Myburgh noted.

The City has made vast savings with the move to pre-paid electricity meters and the same thing can be done with pre-paid water meters. It is within the council’s own power to make the necessary savings.

“The City’s approach to desalination will do lasting damage. The small desalination plants planned for harbours have two obvious problems.

“There are no economies of scale so the water will be extremely expensive and, secondly, harbour water is dirty and contains oil that will clog up the membranes in reverse osmosis plants.

“A third problem is the cost of connecting up lots of little plants to the water supply.

“When the chamber raised the issue of desalination as the ultimate long-term solution to the water problem, our arguments were brushed aside with ‘It’s too expensive’.

“Desalination is not too expensive when done on an appropriate scale. w

“The Middle East runs on desalinated water and a city like Perth in Western Australia uses sea water desalination to supply 17% of its municipal water.

“If Cape Town built a desalination plant to supply 30% of its water the cost of the more expensive desalinated water would be blended in with the lower cost of dam water. The extra cost to consumers over the next 20 years would be less than six percent, a small price to pay for water security.

“We reject the idea that a surcharge on water users would be appropriate to cover the revenue shortfall. You cannot punish consumers for buying less of what the City cannot supply anyway.

“The water problem is the result of poor council planning and they must pay, not the victims. We reject the idea of basing an extra fee on the valuation of the property.

“Many property owners have installed well points, grey water systems and tanks to collect rain water. They deserve our gratitude and should be rewarded. To base a drought charge on the value of the property is unjustified, particularly as their new water systems will add to the value of the property,” Ms Myburgh said.

“The City should find ways to reduce costs in the same way as a private sector company would have to do if it were in a similar position. Exercises like this are painful but sometimes a little pain can concentrate the mind and produce good long-term results and even expose new opportunities,” Ms Myburgh said.

Meanwhile, as a result of the DA’s internal squabbling, Mayor Patricia de Lille will no longer lead the City’s drought plans.

Now the DA executive has handed the baton to Xanthea Limberg, mayoral committee member for informal settlements, water and waste services; and energy, who studied politics and public policy at UCT, and is an Independent Democrat recruit who became a DA councillor.

Although water is political what has public policy got to do with the price of eggs in China?