Ballito residents face a water tariff hike of 4% from next month.

This has been confirmed by Siza Water, which recently submitted its increase proposal to iLembe municipality, with which it has a concession agreement.

The water utility initially asked for a 5.5% increase but the municipality lowered the increase to 4% to come in line with its tariff scale.

The Courier approached Siza Water’s managing director Shyam Misra to explain how increases are calculated.

In Siza’s case, the percentage is determined by a formula that takes into account three main factors – bulk water and electricity costs and the Consumer Price Index (CPI).

Siza buys bulk water from Umgeni Water, which may institute its increases that would have a knock-on effect, although this is not always the case.

Last year, the utility lost a constitutional court case which forced it to accept a tariff increase of 38% from Umgeni Water.

“We absorbed that extra cost and did not pass it on to the consumer because that would not have been a fair way to deal with the situation,” said Misra.

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“We reworked our business model to ensure we could still function despite those extra costs.”

This year’s Umgeni Water general increase of 3.5% has been factored in, however. Electricity costs may appear to not be a significant factor in water provision, but the North Coast’s geography does have an influence.

“Most of our pump stations transfer water contra-gravity from sea level, some to points as high as 110 to 120 metres above sea level. This requires huge amounts of energy,” Misra said.

Given that power is bought from Eskom, which this year instituted a 9.61% average increase, it naturally trickles down to the local economy. Siza also takes into account the CPI to ensure the public are not unfairly burdened.

“Ultimately, cost-reflective tariffs protect both the public and us as a provider, so we do take that into account.”

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Other costs incurred by Siza, which include fuel, chemicals and unforeseen damages as during the recent floods, are not passed on to the consumer, Misra said.

“We were heavily hit by the floods, but most infrastructural damages were covered by insurance. We then made every effort to implement repairs timeously so that we could provide normal service rather than water tankers, which cost money and do not provide any return.”

Indigent households receive up to 10 kilolitres free, while specific cases such as vacant plots have not seen an increase.

Misra confirmed that the lower increase imposed by iLembe would not be passed on to the consumer and would be absorbed by Siza Water.

• This article has been updated from the print version where the official 4% increase had not yet been confirmed.

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