Mbabane – The approved 12 per cent water tariff hike has proven to take a strenuous toll on residents on the capital city, Mbabane.
Following Eswatini Water Services Corporation’s (EWSC) decision to raise water tariffs, which Parliament approved, the Independent News has learnt that some people are forced to resort to rigorous means of saving as the natural commodity becomes scarcer and more expensive.
Residents of Sidwashini in Mbabane, among others are now using the Mbabane River for their laundry as tap water had become costly. It was reported last year in November that reveal that the government-owned company accumulated net profits of E354.63 million over the past five years. It was revealed that it earned net profits of E52 863 759 in 2020, E61 867 654 in 2021, E104.1 million in 2022, E65.8 million in 2023, and E70 million in 2024. These figures are recorded in the corporation’s statement of comprehensive income, a financial statement that encompasses a company’s income, expenses and profits over a specific timeframe.
Parliament approved a 12 per cent increase in water tariffs towards the end of last year. This increase will be phased in over the next three years at a rate of four per cent each year. On the same day, a report from the House of Assembly’s Portfolio Committee on the Ministry of Natural Resources and Energy advocating for the increases was adopted.
The Members of Parliament (MPs) who supported the hike were reportedly swayed by the argument that it would fund EWSC’s initiative to extend services to rural areas. MP Madala Mhlanga, the Chairman of the Portfolio Committee, said the tariff should have been implemented in April of 2024.
MP Mhlanga, who also serves as the Deputy Speaker, asserted that the corporation is operating at a loss, with Parliament informed that EWSC currently makes a loss of E0.2 million. In light of the most recent five years’ Comprehensive Income Statement, the government company has consistently generated net profits. It was revealed that the EWSC is currently managing projects, including the refurbishment and extension of its Emtfonjeni headquarters building. This government-owned company is expanding its head office building at a cost of E85.59 million.
When considering the water tariff hike, the House of Assembly’s Portfolio Committee on the Ministry of Natural Resources and Energy was informed that EWSC incurred operational losses over the past two years but achieved profits after accounting for interest (non-operating income) and tax deductions. The report adopted in Parliament clearly indicated that for the period ended March 2023, the corporation reported a E3.9 million operating loss and an after-tax net profit of E65.8 million.
For the period ended March 31, 2024, the report states that the corporation recorded a E10 million operating loss, but achieved a net profit of E70.5 million. It is projected that this trend will persist in the initial two years of the proposed 2025-2027 multi-year tariff. The report cited delays in multi-year tariff approvals as causing the corporation to incur six-month revenue losses of E11 million. Parliament approved the water tariff increase due to several identified reasons:
- High infrastructural maintenance costs at EWSC.
- Significant costs associated with extending water services to rural areas.
- Misalignment of Rural Water Development and Eswatini Water Services Corporation expectations.
According to the ministry’s justification, the corporation should strive to generate profits from its core operations to reinvest and build reserves for infrastructure maintenance and service provision, thereby expanding access to clean water in non-mandated areas. The EWSC states that the proposed prepaid metering project also requires substantial funding for nationwide implementation, with costs estimated at E600 million.
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