CONSUMERS will have to dig deeper into their pockets after water and electricity tariffs were increased by five and four percent respectively.
The new tariff rates which were announced by the Lesotho Electricity and Water Electricity Authority (LEWA) on Friday will place a further strain on the public who are already reeling from the impact of several price hikes in various sectors in the current financial year.
Consumers have already endured an increase in Value Added Tax (VAT which was increased from 14 to 15 percent in April this year) and the knock-on effects on prices of goods and services. They have also endured several fuel hikes and on Wednesday, the cost of public transport will go up by a massive 23 percent.
All volumetric water charges (based on usage) in all consumer categories will increase by 5, 19 percent.
Sewerage service charges remain unchanged as other charges such as connection fees.
LEWA also approved a Water and Sewerage Company’s (WASCO) budget for the 2018/19 year for the amount of M268, 32 million as opposed to the M269, 97 million that WASCO had requested.
LEWA’s announcement comes on the back of three public hearings in different parts of the country where stakeholders and the public aired their views on the proposed tariff hikes.
In May this year, WASCO filed a tariff application for a tariff adjustment of 12 percent on both domestic volumetric and standing charges. The water utility company had further requested a 15 percent adjustment for non-domestic volumetric and standing charges.
The company also proposed a revenue requirement of M269, 97 million broken down as as M234, 36 million for water services and M34, 61 million for sewerage services.
In the same vein, electricity charges have been increased by 4 percent for all customer categories.
Charges for electricity connection, wiring testing, wiring re-testing, survey, resurvey, licensing for wiring, meter testing and house extension will however, remain unchanged.
LEWA also approved an M918, 85 million Lesotho Electricity Company (LEC) budget instead of the M1, 03 billion that LEC had requested.
In May 2108, LEC submitted an application for a tariff increase of 22, 1 percent for all customer categories.
Announcing the tariff hikes, LEWA chairperson Relebohile Mosito advised the two companies to address their operational inefficiencies.
Mr Mosito also expressed concerns on the quality of WASCO’s water, which he said remain below acceptable standards. He said that called for increased investment in waste water treatment facilities, especially in other districts apart from Maseru.
During the current financial year, red worms and high levels of manganese chemical were reported in the water supplied by WASCO.
“WASCO has to focus on improving its water and effluent quality, increasing its operation and maintenance coverage by billing and reducing its staff costs as a percentage of operation and maintenance to below 40 percent.
“Access to sewerage services is below 10 percent and effective strategies are needed to connect more customers to the already existing sewerage infrastructure in Maseru,” Mr Mosito said.
For his part, WASCO acting chief executive Remaketse Latela said they had no choice but soldier on under the reduced budget that was approved for their operations for the current financial year.
He said they need M229 million to replace all the old network around the country. He said most of their budget was used in maintenance works they had to constantly carry out on the water network which consists of asbestos pipes that were old and falling apart.
“The plans that we had will not all be implemented as we would have liked and that is not a very good thing for us.
“This means we are going to reduce the span of the replacement works on the network. We will have to choose on which areas to cover and which ones to leave out.”
LEWA chairperson Mosito also said that the LEC’s request for a M1, 03 billion budget was not justifiable and it could only be granted if tariffs were by 16, 6 percent.
Mr Mosito also pointed that LEC had made some savings after Mozambican power utility, Electricidade de Mocambique (EDM), slashed its prices for electricity by 40 percent.
LEC buys 72 Megawatts of electricity from the Lesotho Highlands Development Authority’s ‘Muela Hydro-power Station and it augments Lesotho’s daily 156 MW requirements by importing the rest from South Africa’s Eskom and EDM.
Mr Mosito also advised LEC to negotiate a cheaper long-term Power Purchase Agreement (PPA) with Eskom and explore conversion of Eskom Megaflex tariff to the Urban Nightsave Urban Large which would also be a cheaper option.
Yesterday the Consumer Protection Association said they took comfort from the fact that the electricity and water hikes were in line with the annual rate of inflation of 4 percent.
“We are never happy whenever prices go up because that reduces the buying power of consumers. However, we are comforted by the fact that the water and electricity tariff increases are close to the inflation rate.
“This therefore means in real terms there has been virtually no or very small increase in the cost to the consumer this year as compared to the last year, assuming that salaries have also been adjusted to cover the inflation rate,” said the executive director of CPA, Nkareng Letsie.
Government workers were given a four percent raise in April. Workers in the private sector are yet to receive wage increases.