The water affairs minister needs to carefully scrutinise the proposed water tariff increases as they are unjustifiable, the SA Local Government Association (Salga) said.
“The levels of bulk water price increases by water boards are unjustifiable. The environment in which municipalities operate is not conducive to huge price increases given that the economy is only beginning to recover from the recent recession and is facing rising unemployment,” Salga said in a statement.
The water boards had submitted to Parliament tariff increases ranging from 6.2 percent to 43 percent, with areas under the Amatola water board in the Eastern Cape facing a 107 percent increase.
The tariff increases were driven by a plan to implement capital expenditure of 98.7 percent of the current fixed asset value in the period 2010/2011 to 2013/2014.
While Salga acknowledged the role played by water boards in supplying bulk water which met quality standards to municipalities, it said the increases were unjustifiable as the boards had made a collective profit of seven percent above budgeted profits during 2008 and 2009.
It called on Minister Buyelwa Sonjica to “carefully scrutinise the financial and operational performance of each water board during the 2010/2011 financial year in order to determine appropriate increases for specific water boards in the future”.
