The Pricing Strategy for raw water use charges, which was published in terms of section 56 of the National Water Act, 1998 in October 1999, sets out the procedures how charges for authorised water use will in future be determined on Government water schemes, on schemes owned by catchment management agencies (CMAs) and water user associations (WUAs) and in general, for all authorised water users within water management areas (WMAs) for purposes of funding water resource management.
As a result of another public consultation process, the country has recently been divided into 19 WMAs which form the geographical units within which CMAs will be established in a phased and progressive manner to perform water resource management functions delegated or assigned to them. The regional offices of the DWAF will initially function as CMAs.
The Pricing Strategy determines that the DWAF or the relevant CMA can set annual unit cost charges for certain end user sectors for different water uses within the WMA, with the object of recovering the annual cost of related water resource management activities from all the authorised water users in the area. The basis of setting sectoral water resource management charges for each WMA is to divide the budgeted water resource management activity costs allocated to the various sectors, by the total authorised volumetric water use of each sector.
The Act determines under section 59(2) that any person registered in terms of a regulation or holding a license to use water, must pay all charges imposed under the Pricing Strategy in respect of that water use. The intention is to register existing lawful use before April 2001, when water resource management charges will be introduced in priority WMAs.
The Pricing Strategy determines that only the consumptive use of raw water taken from the resource will be priced at this stage. This relates as far as the 11 uses described in section 21(a) to (k) of the Act are concerned only to (a) taking water from a water resource; (b) storing water; and (d) engaging in a stream flow reduction activity.
A pricing strategy is also being devised for waste discharges, but this will come into effect at a later stage.
Sectoral water resource management charges will be announced annually for the following end user sectors in each WMA, where applicable.
Individual water users within the sectors mentioned, and the owners of any abstraction, storage and related distribution works supplying the identified end user sectors in bulk, will be responsible for registration.
A registration certificate will be issued to each water user or bulk supplier containing the volumetric extent of the annual registered water use per sector, which will be based on the information supplied on the standard registration application forms.
The assessment of annual water use from an existing storage dam will be based on the abstraction or supplies from such dam or, if no abstraction takes place, the annual refilling of the dam to augment evaporation losses from the full supply surface area. In the latter case only dams equal or higher than 5 metres and with a storage capacity equal or exceeding 50 000 m3 will be considered for pricing purposes.
The raw water use of end user sectors supplied by WUAs, Water Boards or other bulk water supply institutions must be registered by the relevant supplier who owns the works. The registration certificate will state the total extent of each sectoral use involved, including distribution losses. The different sectoral uses on each scheme owned by the Government, will also be registered as a unit for pricing purposes.
The assessment of annual volumetric water use for pricing purposes will be based on the following methods for the various sectors:
The Pricing Strategy makes provision for the free of charge provision of raw water for basic human needs from water resources and public dams on condition that water services authorities comply with the standards for setting tariffs to be regulated in terms of the Water Services Act, 1997. Authorities must apply for such free quantities, which will then be subtracted from their registered volumetric use for purposes of determining sectoral charges.
The Pricing Strategy contains detail how to convert the data presented by individual irrigators on the standard registration application forms to average annual volumetric use for pricing purposes. This is based on an assessment of crop irrigation water requirements, areas irrigated, in-field irrigation losses and the efficiency of irrigation management, using the results of the most recent research publications.
All registered water users or bulk suppliers within WMAs will be liable to pay differential, but fixed amounts on an annual basis to the responsible authority for purposes of funding water resource management. These water accounts will be based on the sum of the product of the relevant sectoral charge as announced before the beginning of a financial year, and the volumetric water use per sector shown on the registration certificate of the relevant water user or bulk supplier. Payments will be invoiced on a six-monthly basis for the irrigation and stream flow reduction sectors and on a monthly basis for the other sectors.
Drafted: PF PRETORIUS
DATE: 27-09-99