Browsing by Author "Ngcobo, Eugene Sihle"

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    The use and appropriateness of different economic instruments for water demand management at Buffalo City Municipality
    (Stellenbosch : Stellenbosch University, 2006-04) Ngcobo, Eugene Sihle; Muller, K.; Stellenbosch University. Faculty of Economic and Management Sciences. School of Public Leadership.
    ENGLISH SUMMARY : Water demands are growing as a result of the increase in living standards as well as population and economic growth. On the other hand, water resources are limited in availability. The scarcity of water has led to a paradigm shift from supply management to demand management. Several laws and policies have been developed in South Africa to drive the need for water development management. The main objectives are to promote sustainable use of water, economic efficiency, cost recovery and water pollution control. To meet these objectives, several water demand management measures have been introduced which involve technical measures, financial incentives, legal instruments and institutional arrangements. The concept of water as an economic good has received worldwide acceptance which has led to the potential role of economic tools in managing water demand. The use of economic tools in providing socially acceptable decisions, efficiency and addressing equity is in line with Agenda 21 and the Dublin principles. The Buffalo City Municipality, like any water services authority, is expected develop water conservation programmes and promote sustainable use of water resources for its jurisdiction. One of the instruments that Buffalo City can use is water pricing. Water pricing is one economic instrument that has bee'n widely used in water demand management. The success of water pricing structures depend on factors such as quality of administration, political and public acceptability, and sustainability of water supply. Coupled with this, is a proper policy framework that promotes public awareness. Failure to consider these factors, when designing water price structures affects the effectiveness of the instruments negatively. A Buffalo City Municipality investigation revealed that there is considerable understanding of the need to price water at a marginal cost level. It showed that the water pricing structure used that accommodates equity and efficiency , primarily serves the purpose of financial sustainability through cost recovery and sustainable use of water through use of pricing structure. However, the effect and the appropriateness of the pricing structure cannot be easily measured because of a poor billing system and administration incapacity.