Water Prices Are Too Low

Here’s another indication that publicly supplied water prices where they are presently set are too low, and that they will rise sharply in the future.

THE government hoped to attract R25bn from foreign investors for maintenance of its ageing water infrastructure, which it could possibly co-fund, Water Affairs Minister Edna Molewa said in Marseilles yesterday, reports Business Day.

The government wants to attract resources from abroad to fund reinvestment and maintenance. Taxpayer monies have been squandered on anything other than maintaining the water infrastructure, just like with electricity and road infrastructure.

If the government can attract resources from abroad, it could postpone lumping the bill with South African taxpayers.

However, foreign investors will want to see a return on investment, and that would need to be funded by profits generated through higher water sales revenue in the future – which will be generated with higher prices.

Whichever route this takes, the government will be extracting huge sums of money from the private sector to get their hands on the resources to patch the failing water infrastructure.