The impact of pricing of raw water on cost of treatment and ultimately on the cost of potable water

Abstract

The Department of Water Affairs and Forestry (DWAF) sells raw water to water boards, generally at a fixed price determined annually. The cost of this water does generally not take into account the quality that the water boards receive. Water boards are then expected to treat this water to a certain specified standard for distribution to local authorities which then supply consumers. Consumers are charged based on the volume they consume, presumably a charge that would recover the cost of treatment and other associated overheads, which are agreed upon in advance. The result of this could be one of two things, namely that the consumers in different parts of the country pay different rates or that the water boards may be operating at a loss.

Based on recent and ongoing research in the Vaal River system, this paper looks at the implications of this on the final cost of treatment and ultimately on the cost to consumers and suggests ways in which raw water could be priced to ensure fairness and spread of burden to the consumers based on quality requirements.