Property Plus
Bangalore
Chennai
Hyderabad
Kochi
Malabar
Thiruvananthapuram
Getting the pricing of water right
For long, economists have been holding the view that getting the prices right is crucial to the sustainable delivery of piped water to urban households. For the customer, the correct price of water ensures access to clean water and signals that excess consumption attracts penalty and, therefore, he or she is dissuaded from over-consumption. For the institution, it means the ability to maintain the system for efficient delivery of water as well as to be able to invest for e
xpansion of services.
Many cities charge for water and include it as part of the property tax. This is an indirect way of recovering revenue. Others charge a flat rate based on the dimension of the connecting pipe.
There is an increasing consensus, however, that block tariff makes the most sense. This is what cities such as Bangalore and Hyderabad use for their water charges. in Bangalore, consumption up to 8,000 litres attract Rs. 6 a kl and between 8,000 litres to 25,000 litres, Rs. 9 a kl. There is a separate charge for non-domestic consumption and for industrial consumption on a flat basis. These utilities try to provide access to basic water requirement at affordable prices but ask consumers with heavy consumption to pay more. The non-domestic and industrial connections actually cross-subsidise the domestic consumers, bringing in an element of social justice.
Metering
For historical reasons and thanks to far-sighted decision-makers, Bangalore has had an effective metering system almost since water supply started from Thippagondanahalli reservoir in 1932 and, therefore, is able to levy an effective volumetric charge.
Without metering and a system of reading and recording the meters it is impossible to levy an increasing block tariff and to have any meaningful method of charging for water.
While typically the price of water should depend on the marginal cost — the cost of obtaining the next unit of water for consumption —, knowing the production cost is important. On this will depend the pricing.
S. VISHWANATH
Printer friendly
page
Send this article to Friends by
E-Mail
Property Plus
Bangalore
Chennai
Hyderabad
Kochi
Malabar
Thiruvananthapuram
|
