Given that people tend to waste what they don't pay for, is it time we started viewing access to clean water as a privilege rather than a right?
The approach of a government to water rates, and the latitude it grants suppliers in charging customers, will directly affect the efficiency of consumption and delivery.
Adam Kingdon, CEO of i2O Water – a company that provides technology for optimising the pressure in water distribution systems – maintains that free water is not actually in the best interests of consumers. True to the logic that people tend to waste what they don’t pay for, Kingdon says that low or absent water rates discourage efficient use and capital investment in infrastructure: “When you give people free water, there’s no incentive to manage it efficiently.” Saudi Arabia – one of the driest nations in the world – offers an extreme example, he says. There, the Government supplies water at virtually no charge: consumers pay less than 0.03 cents per cubic meter. And yet the associated energy and financial costs of desalinating seawater and pumping it through thousands of kilometres of leaking pipes are staggering. New tariffs and pricing structures, such as proposals to impose fees for water used by non-citizens, are a matter of ongoing debate, but the Government has acknowledged that free water is not in the public’s best interests, because it leads to under-investment in infrastructure.
Cambodia, by contrast, illustrates how charging water tariffs can improve water access for consumers. The government-owned Phnom Penh Water Supply Agency was once a decrepit, war-torn system, wherein only 13% of households were metered and illegal connections were rampant. But under the direction of engineer Ek Sonn Chan, an approach based on charging small fees has not only brought clean water 24 hours a day to the entire city, but lowered costs for the urban poor and improved public health.
However fundamental a need, the cost of water is too much for some. In the UK, Wessex Water is the first to introduce social tariffs and flexible payment plans, recognising the financial difficulties of some of their customers. Working with agencies such as the Citizens Advice Bureau to assess the level of need, it offers lower tariffs for those in extreme financial difficulty, and various plans to help those in water debt get back on track.
The business case for this is clear. “The cost of bad debt, which has been increasing, gets spread across the whole customer base”, explains Dan Green of Wessex Water. “By building a better relationship with the people who are genuinely struggling to pay, and helping them to get advice, we actually bring more money in than if we remained inflexible in our payment plans.” – Katherine Rowland