Ekurhuleni Metro informed us that from beginning July most of us would no longer receive the “free” monthly water allocation. This was because it was a big loss in revenue to the metro.
This is an interesting reason which on the surface seems plausible. However, if we revert to the universal statement “nothing is for free” and apply our minds with the latter as a starting point we should arrive at the metro is again ripping us off.
As an example let’s apply our minds to a company wanting to introduce a new product into the market. There are costs for radio, TV and print ads. In certain cases, samples are distributed at retail outlets, for “free.” All the latter are covered by a marketing budget, which is included in the cost of the product.
Rand Water charges the local authorities for the bulk water they draw. This cost is passed onto the consumer (including a markup).
The metro supposedly gave us a few kilolitres of water each month for “free.” No way. The cost of this “freebie” was built into the kilolitre price we were charged for the additional water consumed. If it wasn’t, then this loss on water would have to be recouped somewhere in the myriad of charges to the ones who actually pay for services.
What is of concern is that the consumers’ charge also has to cover the millions of litres lost by the local authorities’ pathetic inability to fix leaks quickly and replace ancient infrastructure.
In addition, there is also the cost of all the water used by the non-payers, way above the free allocation.
The double whammy, besides now charging for the previously “free” kilolitre, the metro also slapped us with a way above inflation increase in the charge for water.
We can confidently say that this huge swell in additional revenue the metro will receive will be wasted on “fruitless” expenditure.