A study by Professor Roman Grynberg and Kedibonye Sekakela of Botswana Institute for Development Policy Analysis (BIDPA) has cast doubt on the feasibility of construction of a water pipeline to the Zambezi.
In their BIDPA Working paper 35 entitled Water Pricing and Policy in Botswana, Professor Grynberg and Sekakela said while government has reached an agreement with the Zambezi Watercourse Commission (ZAMCOM) to abstract 495 millions of Cubic Metres per annum from the Zambezi River,
such plans might not succeed if there is no thorough reform on water pricing.
Casting doubt on the project, Grynberg and Sekakela said; “To build the pipeline to the Zambezi will cost P11.8 billion and result in a long run cost of water.
It is highly unlikely that any international financial institution will agree to finance the project without thorough reforms of water pricing which would see water tariffs rise substantially.”
The two economists urged government to start with adjusting pricing structures that than wait until later.
“The water price in Botswana will need to reflect the cost of developing the new pipeline from Zambezi.
The adjustment to the price of at least P22/ m3 must be phased and needs to be modified to take into account several important government objectives;
which includes assuring low income segments and businesses are not further disadvantaged by higher costs,” said Grynberg and Sekakela.
Water Utilities Corporation (WUC) need to develop a uniform and consistent price for water to mining companies which reflects the fundamental scarcity of water and the highest rates paid in competing and less water scarce mineral provinces,” reads the study.
The study shows that in terms of water tariffs, Botswana has been the lowest in the Southern African Development Community (SADC) region.
It revealed that water prices to the low income group that is the first tier in Botswana’s block tariff system are now lower than in any of the Southern African Development Community (SADC) countries.
Ten years ago, the study said, Botswana was amongst the most expensive SADC countries in respect to water tariffs.
“However, between 2003 and the first quarter of 2012, there was no price increase and as a result real prices had fallen substantially.
Following the May 2012 increase, the 1998 real prices have been restored,” reads the study.