Have Another Glass of Crisis

Independent water expert Anthony Turton told the Business Day: “I predict the price of water has to increase dramatically, to double or even treble. If we don’t do that we won’t catch up with our growing (infrastructure maintenance) backlog…. We had a sophisticated economy based on sophisticated infrastructure, but we have not invested in that infrastructure over the last 17 years.”

Neglecting infrastructure maintenance is a political decision, says independent water expert Richard Holden. “It is a short-term way of keeping costs down … (but) like in any normal business you have to price for asset depreciation, maintenance and so on or you run your asset down and can’t replace it.”

The government is going to suck massive amounts of resources from the private sector to pay for the mess it has created after a good 17 year party since the ANC took over. This is going to be a water price crisis, not so much a water shortage crisis. There is a mismatch of supply and demand because water prices are set too low by the government. The increase of water prices is going to be dramatic to make up for this. This has major implications for household spending and corporate factor prices. A big re-allocation of resources is on its way. Be ready for it.

Read the Business Day article, here.