Accessing the utility of Free Basic Water?

1. Accessing the utility of Free Basic Water? Julie Smith University of Natal and Water Action Campaign South African Civil Society Water Caucus June 2003

2. Introduction • Access to the utility of Free Basic Water • Experience on the ground • Policy • Recommendations

3. Access to FBW • FBW policy entitles all people to a free lifeline supply of 6000 litres/6 kilolitres (kl) of water per household per month; or 200 litres per household per day; or 25 litres per 8-member household (DWAF, 2002) • 26.8 million people have access to FBW (Muller, 2003) • Access to the ‘utility’ of FBW? • Low-income households consume 20-25kl per month and are not accessing the utility of FBW, as they require more water than 6kl to satisfy basic needs.

4. 2 fundamental flaws: • Basic water requirements • Per household versus per capita Basic water requirements (BWRs)- • FBW provides 200l per household per day • 8-member household = 25l/person/day • 25l/person/day does not meet BWRs for health and well being of households (DWAF acknowledges this) • Why is DWAF providing a minimum that does not meet health and productive life objectives? • Short-term goal 25l and medium-term goal 50-60l. Surely 9 years is already medium-term? • What steps are being implemented to ensure medium-term goal?

5. Studies on BWRs not comprehensive • SAMWU (2002), AIDC (2002) and Gleitch (1996) suggested that the BWRs should be 63l but ignore children, the aged and HIV/AIDS influences on consumption. • Hence research is suggesting the BWR be raised above 63l. • Current consumption patterns stand at 89-111 litres per person (20-25kl/month- Municipal figures for low-income urban households). • Urgent that BWRs be ascertained. • FBW standard bears no relationship to the basic water requirements of households(AIDC, 2002).

6. Per capita FBW allocation • Ignores the fact that proportionally large number of low-income households with more than 8 members, especially if households are billed for their backyard shack rental residents (Bond, 2003).  • The bias in the use of the term ‘household’ as the unit of analysis has the implication that the FBW benefits are inequitably captured by wealthy small member households. • HOW? Per capita FBW allocation: adding additional record to the bill, so that the number of people per household is recorded e.g. using I.D. numbers or other confirmation of household members and checking it annually with a national data base preventing people from abusing the system (Bond, 2003).

7. Experience on ground • FBW policy is based on the incorrect assumption that low-income households use less water because of their low-income status. • The FBW policy allocation of 6kl fails to account for the BWRs and significant factors influencing consumption: • Household size • Number of dependants • Illness status of household (HIV/AIDS) • Flush toilets • Differentiation between weekday and weekend • Rural/urban location • Water for productive use (food security)

8. Many low-income households face significant access and affordability constraints as a result of a policy purported to increase the accessibility to water for all South Africans • Assumption that low-income households accessing FBW-using more so… • Pushed into higher 2nd blocks (affordability?) • Not subsidised • Face punitive measures for inability to pay.

9. Policy • Inability to pay (over 6kl); brands households irresponsible and ‘absolute right to access water’ waived and ‘minimum core right’ comes into effect. • ‘Minimum core right’ might be acceptable if basic water requirements were met by FBW; but they are not. • The FBW policy is in breach of the constitutional right of households to access adequate and affordable water to meet basic domestic needs and water required to satisfy productive life imperatives.

10. Recommendations • The FBW policy should be fundamentally re-worked. • A national FBW evaluation should be implemented (parallel process to create platforms whereby community experiences to FBW elicited and municipal ‘accessing utility of FBW’ statistics. • The basic water requirements for health, well being and satisfying productive, sustainable livelihoods should be scientifically calculated and socially assessed.

11. The amended policy should incorporate all factors affecting consumption (diverse and integrated approach). • Per capita versus per household FBW allocation • Access to water should take into account the following factors: • Household demographics and household water usages • Income and service expenditure statuses • Willingness and ability to pay • Tariff structures

12. Tariffs: • 1st block: amended FBW (BWRs); • 2nd block lifeline tariff (20-25kl); • then steep rising block tariff-based on conservation incentives (the higher the marginal cost for high consumption, the more customers will be aware of the merits of conservation and the fewer dams will have to be built (Bond, 2003).

13. Ease in which households can convert to lower consumption allocations • Outcomes of evaluation, basic water requirements and low-income experiences should be integrated. • IMPORTANT:caution against advocating for a fixed volumetric allocation; rather should advocate for the integration of all factors necessary for a amicable policy changes.

14. 3 Financing options for FBW • Increase internal cross-subsidies mobilised WITHIN municipalities that have sufficient surpluses – specifically through businesses (tariff blocks have remained unchanged- they should take the appropriate concave shape).   b) Mobilise internal cross-subsidies WITHIN the water sector so that huge potential funding available through DWAF's charging wealthy white farmers, Eskom, mines/ industry and other (non-municipal) users of water can be made available to municipalities that don't have large water consumers within their boundaries.

15. c) Substantially increase equitable share grants through the National Treasury to municipalities, given that national to local grants for operating expenses fell 85% in real terms during the 1990s (according to Finance and Fiscal Commission) and the 1991 levels have not been reached in spite of massive 'unfunded mandates' that central government placed on municipalities after 1994.

16. Some of the equitable share should go to boost the operating/ maintenance revenues for the municipal water sector in areas where internal cross-subsidisation is not high enough; and other national funds should go to capital investments in water/sanitation, as well as other services that municipalities struggle to maintain e.g. township infrastructure (Bond, 2003).