Tariff
Tariff
Under the Water Act of 2016, WASREB is required to establish Guidelines for tariff setting by water-provided
Tariff Review Objectives:
- Ensure financial sustainability
- Foster access to Safe Water as a Human Right
- Promote efficiency in the delivery of water services
- Encourage conservation
- Ensure simplicity in the pricing structure of water.
The tariff review process is necessitated by the following factors
- Dependence on subsidies has become unsustainable.
- Tariffs that outlived their usefulness.
- The continued rise in the cost of inputs.
- Increments in the cost of electricity, fuel, and their spiraling effect.
- Unsustainability of most WSPs and WSBs
Under the Licence, tariffs charged are meant to accommodate the need to have cost recovery, cross-subsidization, and where feasible the expansion of infrastructure.
The tariff review process focuses on balancing commercial and social interests in water service provision. The fixing of tariffs considers justified costs, to eliminate any costs that may result from inefficiency, and which should not be borne by consumers.
Wasreb has developed Tariff Guidelines to fix tariffs that balance commercial, social, and ecological interests thus ensuring access to all while allowing WSPs and WSBs to recover justified costs.
Recognizing that WSPs differ in category and size, the Guidelines address different requirements as follows:
- Setting out approaches to tariff adjustment
- Spelling out requirements that WSPs and WSBs should meet for tariff adjustment applications
- Setting out methodologies for tariff review analysis, approval, and subsequent adjustments over time
Thus, tariff adjustments enable WSPs to attain cost coverage of operations and maintenance, while improving performance in specified indicators. Gradually, adjustments are made to cover full cost recovery to ensure long-term sustainability.