Administered prices study on economic inputs: water sector: final report

Abstract

The study found that prices for water supplied to industry in South Africa have generally risen faster than inflation over the period 2001/2 to 2006/7. Municipal water prices to industry have risen by an estimated 62% in the period 2001/2 to 2005/6. Domestic prices rose 60% in the same period, compared to PPIX and CPIX rises of 30% and 32%, respectively. Prices for bulk supplies from water boards rose by an average of 42% over the same period. Prices for bulk water supplied by DWAF varied widely as the new pricing strategy was implemented but rose by an average of 21% over the period 2002/3 to 2005/6 compared to a CPIX rise of 16% over the same period. An understanding of these price changes is complicated by the relatively complex structure of the water industry and the limited information that is easily available about it. Prices vary according to source, supplier and location. Water may be supplied to industry directly by the national Department of Water Affairs and Forestry, by regional water boards or by municipalities, while some companies in isolated areas supply their own needs.