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WATER TARIFF HIKE EXPECTED

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MBABANE – Businesses and consumers are expected to endure more hikes this year, especially a water tariff increase.

Eswatini Water Services Corporation (EWSC) had initially proposed a three-year tariff increase with the 2021/22 proposal being at 3.8 per cent. For the 2022/23 financial year the corporation had proposed a tariff increase of nine per cent with an additional hike of 10.2 per cent for the 2023/24 financial year. The above mentioned proposal was not successful after the ministry of natural resources and energy’s Parliament Portfolio Committee turned down the request by the Eswatini Water Services Corporation (EWSC) to have a tariff increase of nine and 10.2 per cent between this year and 2024.

Increment

Instead of applying the staggered approach to increment which resulted in what appeared to be unreasonably higher rates in other periods, a flat rate was recommended by members of the committee. The recommended revised tariff proposal incorporating a recommended flat rate of 6.6 per cent was to be staggered in three years starting from this year to 2024. This means the increase can be implemented as early as April 2022. The Water Tariff Increase Regulations Increase Regulations were initially tabled in the House of Assembly on May 25 last year.

The regulations were on the same day called for debate and were accordingly referred to the portfolio committee. EWSC presented the proposed multi-year tariff increments to the portfolio committee for 2022 to 2024. The scope of the presentation covered mainly the reason for requesting the increments which in summary which in summary was to adjust the tariff to a level that covers operating expenditure and working capital.

Expenses

The proposed tariff increments also took into consideration operating expenses for projects which are due to be completed in the tariff period. The committee whose Chairman is Ngundzeni  Member of Parliament Bigboy Mamba noted the presentation by the corporation with concerns. The major concern was on the staggered tariff that though the initial rate increment as lower at 3.8 per cent (2021), the jump to nine and 10.2 per cent appeared to be unreasonably higher and might not be appropriate in the current economic and political climate.

The members of the committee felt that even though it was appreciated that the tariff needed to increase to cater for operational expenses, including projects, such increments were sensitive in nature given the prevailing political climate. The last concern raised was the delayed implementation of the 2021/22 annual increment. It was due for implementation in April last year. Meanwhile, EWSC at the time had already lost operating revenue amounting to E3 million and any further delays to the tariff implementation would be detrimental to the corporation.

Increase

Once approved, the operating revenue for the corporation was projected to increase from E414 million in 2021 to E453 million this year. It could further increase to E502 million in 2023. The operating expenditure was projected at E393 million last year. It is estimated at E441 million this year. In the tariff period, key areas and projects for expansion of supply include the Eswatini Water Supply and Sanitation Access Project in the Shiselweni Region. Nomahlubi Matiwane, who is Public Affairs and Customer Experience Manager at EWSC had not responded to a message on the proposed tariff by around 1pm yesterday.

In a recent interview, she had said tariff reviews and adjustments were necessary as EWSC operated in a high cost environment. “The Corporation uses an increasing block tariff structure, where cost recovery is only achievable at the highest block,”  she had said.

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