Calls to scrap pipe levy as City of Cape Town’s dams fill up
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Cape Town - With the City’s dam levels sitting at 93.2% capacity, lobby group Stop CoCT has called for the immediate scrapping of the “pipe levy” and the return of the free 6kl free water for all households.
The group said while the municipal act governing tariff changes allows for tariffs to be adjusted once a year, the City can follow the same process which was used when the increases were approved and the fixed water charge outside the usual annual tariff budget cycle was instituted.
Sandra Dickson from Stop CoCT said at the time of the steep increases of water tariffs in 2018 the City took advantage of the State of Disaster to push for the fixed basic charge.
“The current water tariff block system was brought in by the City Council in January 2018 and was done under the auspices of the then State of Disaster in the province due to the drought at the time.
“The punitive water tariffs and much hated 'pipe levy' or fixed water charge was instituted after the public rejected the proposal of the City for a temporary fixed drought charge,” said Dickson.
Dickson said this fixed water charge has guaranteed the City steady, easy and guaranteed cash flow.
“This had proven true, as since then the water department had been enjoying healthy surpluses and expanded rapidly. This fixed charge is nothing but a tool used by the City’s finance department to extract more revenue from the public.
“Our water tariffs are set at the lowest level the current tariff block system allows for. This proves the short-sighted and erroneously calculated water block tariff system that leaves City no room to manoeuvre,” she said.
Bo Kaap Civic and Ratepayers Association chairperson Osman Shabodien said water was a constitutional right and no profit should be made from it.
Mayco Member for Water and Waste Xanthea Limberg said the fixed basic charge was not introduced during the 2017/18 financial year, but as part of the formal 2018/19 Budget Process and came into effect from July 2018 as a permanent charge.
“She said prior to the drought, the revenue from customers who used high volumes of water allowed the City to cross-subsidise the lower tariff steps and the tariff structure had to be changed as it was no longer sustainable.
“The fixed basic charge is not an additional charge and the removal and the discontinuation of it will lead to massive increases to the usage tariffs to compensate. Such a suggestion would thus not be feasible for the City,” said Limberg.
She also added that the current water tariff model was not introduced during the drought, but rather that the City has had a block tariff system for about 20 years.
“This type of tariff model is used by many other municipalities. Cape Town has always been considered a water-scare region.