Cape Town residents may have to pay a monthly “drought charge” for about three years from February, as officials try and raise R1 billion annually while dams in the province recover from the worst dry spell in more than a hundred years.
Details about the proposed charge are contained in a report to be considered by the council of the City of Cape Town, which was signed on Friday by, among others, Mayor Patricia de Lille.
“If the necessary authority is granted, the January 2018 adjustment budget will include, for consideration by council, a submission to implement this drought charge… to raise an amount of approximately R420m in the 2017/18 financial year,” the report says.
“In future years the drought charge would be required to raise funding of approximately R1bn per year while the dams recover from the unprecedented drought conditions.”
The charge, if authorised by National Treasury, would be in place until the 2020/2021 financial year.
The report said that during this period, the water tariff structure would be “extensively overhauled”.
Charge ‘progressive, equitable, pro-poor’
Money collected as a result of the charge would be used to “soften the diversification process” from surface water resources to multiple water resources. The drought charge, if based on property valuations, was viewed as “progressive, equitable and pro-poor”.
It was proposed that the charge would be applicable to residential properties valued from R400,000 and commercial properties valued from R50,000.
A home valued at R600,000 would pay a monthly drought charge of R35, while a home valued at R50 million would pay R2,800.
In terms of commercial properties, one valued at R500,000 would pay R60 a month, while one valued at R500 million would have to pay R56,000 monthly.
‘Households not saving enough water’
The report said the charge was not meant to be punitive.
“[It] is necessary to ensure water supply for all residents as acute water shortages will have dire implications for all residents and the local economy,” it said.
The report said that with dams at dangerously low levels and based on current consumption, “day zero”, when most taps are expected to run dry, could be in May 2018.
“At this point residents would have to collect water from approximately 200 collection sites across the city,” it said.
“There are still many households who are not saving enough water… the city has to bring additional water supplies online as speedily as possible in order to avoid acute water shortages.”
The City of Cape Town’s administration, according to the report, had reprioritised projects to focus on water augmentation.
As a result, R473 million had been diverted from other departments to fund new water augmentation programmes.