National Water Act: Revised pricing strategy for raw water use charges 2024.

This Revised Pricing Strategy is a sectoral framework that establishes a multi-year system of charges to ensure a predictable and transparent approach to raw water pricing. It applies to various categories of water users, including agricultural users, municipalities, industry, mining, strategic users, streamflow reduction activities, and non-consumptive uses. The Strategy defines distinct charge categories, including for (i) Water resource management; (ii) Water resource infrastructure; (iii) Waste mitigation; (iv) Water research levies; (v) Economic regulation; (vi) Non-consumptive water use. Water Resource Management Charges (WRMC) apply pro rata to all sectors based on their water use within a Water Management Area (WMA). Agriculture, municipalities, industry, mining, and strategic users must cover all abstraction-related WRM costs. Resource-poor farmers and tree growers receive a 10-year phased-in exemption, with no charges for the first five years, followed by a 20% annual increase until full payment in year 10. Afforestation is subject to WRMC, except for dam safety control.
The overall objective is to support the National Water Resources Strategy (NWRS) by promoting efficient, equitable, and sustainable water management. This ensures water is allocated optimally to drive economic growth and social development while maintaining environmental sustainability. Key objectives of the document are as follows (i) ensure cost recovery for achieving and maintaining resource quality objectives through water use charges; (ii) implement cost-effective water resource management systems that do not overburden users financially; (iii) secure adequate funding for the operation, maintenance, and development of water infrastructure; (iv) support transformation and equity in water access, addressing racial and gender imbalances; (v) promote the financial sustainability of water management institutions; (vi) encourage water use efficiency, ensuring pricing reflects scarcity to drive conservation and optimal economic allocation; (vii) establish a clear pricing regime for raw water use and discharge.
Regarding Risk Management in Water Pricing, the document emphasizes aligning water pricing with government policies and the user-pays principle, ensuring funding for the ecological reserve and sustainable ecosystems through Water Resource Management (WRM) charges. All registered users must contribute to resource quality maintenance, following the polluter-pays principle. Under Section 56(3)(e) of the National Water Act, the Minister may waive certain charges for specific users for a defined period. Additionally, relief from other government departments during natural disasters may help cover water charges. In veld fires or floods, the Minister may fully or partially waive WRM charges based on damage to crops or plantations, but cash grants are not included in the pricing strategy. During droughts, water charges for farmers on Government Water Schemes adjust based on supply availability, with depreciation waived and other fees reduced as water availability decreases. This approach provides financial relief while ensuring sustainable water management.
The document outlines that the pricing strategy will be implemented through a multi-year charging system, with detailed timelines and institutional responsibilities to be defined. Key themes include the importance of stakeholder involvement in the process and the need for compliance with regulatory frameworks to ensure effective water resource management. It also highlights the significance of monitoring and reporting on water quality and resource allocation.