Yesterday, I wrote a post about Eskom and the trouble with low electricity prices and how they result in capacity disappearing.
Do you know what else is particularly cheap? Some might say unusually so?
Here’s a comparison of tariffs:
Here’s a map:
What you might notice is that there seems to be a fairly strong link between cheap water (China, India, South Korea and Mexico) and water scarcity. Of course, sometimes water is cheap because it’s plentiful (Russia). But surely it makes no sense that water should be cheaper where it is scarce?
Although I guess that you might say that those countries where water is scarce also have large populations of the poor – who cannot really afford to pay more.
Looking at South Africa’s Tariffing
South Africa doesn’t really have a central regulation for water tariffs – these are set by individual municipalities and water providers. So I went in search of the Johannesburg water tariffs, and found them here.
Bear in mind that Johannesburg has almost reached full water distribution capacity, in a country that is water-stressed (see how red we are in that map above).
For the 2013/2014 year:
- The first 6 cubic metres of domestic water usage are free.
- The next 4 cubic metres of domestic water usage are R5.84 each (about $0.50).
- If you want to average that out, we’re talking $0.20 per cubic metre in your average domestic home – assuming each home uses 10,000 litres of water per month.
- Which is about the same price as India’s water.
And if we’re going to look at commercial usage:
- The first 200,000 litres are R20.96 per cubic metre (per 1,000 litres).
- Anything above that is R21.72 per cubic metre.
If the correlation between low prices and water scarcity are anything to go by – Eskom might just be the least of our problems.
Here’s another map of water stress:
And because we’re talking about water, an infographic:
Infographic by Seametrics, a manufacturer of water flow meter technology that measures and conserves water.
Yoh – the day that rolling blackouts turn into rolling dry-days. Although, I guess it’s already happening in Johannesburg’s northern suburbs. Fourways, thoughts?
And if you’re really keen for some doom and gloom – check out this report from the World Bank. In particular, the picture of the receding waterline of Lake Chad. Hectic.
Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.