Amended tariff structures and the indigent policy, if correctly equated, could promote the affordability of water delivery services for low-income households. The Msunduzi tariff structures suggested that tariffs were neither affordable nor equitable to Msunduzi low-income households. A national review of tariff structures should be initiated as poorly equated tariff structures, as evidenced in Msunduzi, are not unique to Msunduzi municipality. Many municipalities have similar irregularities and these should be investigated. Progressive redistributive tariffs should be implemented to promote cross- subsidisation and conservation incentives. Stronger regulation mechanisms should. be implemented by DWAF to ensure that the tariff principles, as stated in the Draft White Paper on Water Services, are upheld. The indigent policy may be valuable in increasing the accessibility and affordability of water and other basic services. However, its value should be reviewed and the low-income socio-economic constraints should be factored into the amended policy e.g. household size, number of dependants, illness status, household water activities, income and expenditures. Thereafter, the indigent policy should be fast-tracked and all qualifying households should be assisted in registering for
the subsidy. This could be administratively possible through employing more staff to achieve this purpose. The indigent policy's relationship with the FBW policy should be reviewed and the scope of the indigent policy should be expanded to ensure that no households/persons, genuinely qualifYing for such a policy, slip through the net.
7.3.1 Tariff structures
There should be a national review of municipal tariff structures to assess if the tariff principles, as stated in the Draft White Paper for Water Services, are endorsed. The Msunduzi municipal tariff structures suggested that the tariff principles were not being satisfied. The Msunduzi tariff structure (for domestic users) had two blocks: the 1st block (6kl) was charged at R17, 07 and the 2ndblock (7kl+) was charged at R5, 62 per kilolitre (figures provided by Treasury and Water department, 2003, refer to figure 5.2).
The Msunduzi tariff structure, for industrial consumers, had the following blocks:
R2.95 [0-400kl], R2.76 [401-1000kl] and R2.28 [lOOlkl-no limit], refer to section 6.3.1.
Such a tariff structure provided industry with concessions for high water consumption.
The Msunduzi municipal tariff structures should be adapted to ensure that social and environmental imperatives are addressed before economic considerations and that high volume consumers cross-subsidise low volume users (which is not currently the case).
Amended tariff structures should take into account all associated low-income household service expenditures (electricity, rates, rent, food, school fees, transport and medical expenses), willingness and ability to payl, social justice, environmental sustainability considerations and social acceptance indicators to ensure that the final tariff structure is affordable and acceptable to low-income households. The following suggestion is provided: 1st block, amended FBW (equated by considering basic water requirements and all associated factors); 2nd block (upper limit 25kl), lifeline tariff; 3rd and 4th block to account for high volume consumption. The FBW allocation should be calculated at zero cost to the citizen, the lifeline tariff should be calculated at an affordable rate and the 3rdand 4th block be calculated at an economic rate. Only if the citizen falls into the 3rd or 4th tariff - hence high volume users, higher than the amended FBW and lifeline tariff, should they pay the FBW tariff. The 3rdand 4thblock should be much higher than the 2ndblock to provide incentives for the wise use of water and provide for large cross- subsidisation opportunities. The progressive redistributive tariff system should meet
1 It is essential that tariff rates correspond with the 'willingness and ability to pay' of low- income households if payment rates are to be socially acceptable and the rates of payment, by households, are to increase.
equity and affordability objectives, whilst promoting the sound use of the resource (conservation and money-saving incentives for all consumers) and ensuring amicable cross-subsidisation from high to low volume users. Such a system emphasises the importance of the accurate calculation of the FBW allocation and suggested lifeline allocation. DWAF should enforce tougher regulation of tariffs and should not just suggest tariff recommendations. Equity should prevail and the tariff principles should be upheld.
7.3.2 Indigent policy
As indicated in table 4.4, the total average income for all study areas (R932.17) . suggested that the average household, in the study, qualified as an indigent household (earning less than R1378 per household per month, see 2.14). Despite the indication that most low-income households would fall in the indigent category and receive certain benefits (albeit limited), the indigent policy should be reviewed to ascertain if it acknowledges the special socio-economic constraints of all low-income households to ensure that no justified qualifying households fall through the system. All factors should be considered e.g. the number of household members, number of dependants, income and basic service expenditures, people living with HIVIAIDS and dependency on social grants. As it stands, the indigent policy benchmark provides a fixed amount per household and does not take into account the factors mentioned above. All variables should be included in determining which households qualify for the indigent policy and how much should be allocated per capita in that household. This could be achieved through providing each variable a social ranking and matching this with an equivalent concession (denoted as an increase in the benefits). Hence, the beneficiaries of such a system would therefore receive varying degrees of assistance, which should make a difference to livelihoods and not simply be a respite to numerous survival- challenges. The indigent policy should than be fast-tracked and all households classified as indigents should be assisted in registering for the grant, as it is a policy that should have a significant effect on the well-being of low-income households.
Administrative assistance should be achieved by increasing staff numbers in administrative centres, employing field-workers to provide 'house-to-house' assistance or by organising community meetings where indigent policy procedures can be discussed and the relevant information and forms disseminated. The indigent policy and FBW policy relationship should be reviewed. Assuming no change in the FBW
limit, the indigent policy should cover additional water consumed above the inadequate 6kl allocation. Indigent households should not face water restrictions if they consume more than the insufficient FBW allocation. Credit control mechanisms, however, could be applied if households use more than the suggested 2ndblock of 25kl (see 7.3.1) after considering household size and water usage activities, but they should not undermine the fmancial constraints faced by low-income households classified as indigents.
Because affordability mechanisms are not yet receptive to the socio-economic constraints of low-income households, credit control policies can undermine the socio- rights of low-income households. Affordability mechanisms, amicably equated and implemented, should be seen as synonymous with promoting human right imperatives i.e. dignity. There is a place for credit control policies in the case of the disregard or misuse of services. However, if credit control policies are utilised to erode the access to basic services, based on inability to pay, than they are unacceptable and should be amended.