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An analysis of water pricing instruments governed by the DWA water pricing strategy, and its potential for generating revenue for CMAs
Expanded Title:In any organization, the organizational mandate guides the organizational functions, while the organizational functions determine the cost structure. Successful organizations manage to acquire the funding required to address the cost structure. The key purpose of this project is to investigate the mechanisms, conditions and viability of revenue selected streams required to address the cost structure of Catchment Management Agencies (CMAs) in South Africa. The investigation assumes a resource economics based point of departure. Common pool resources such as air, water and certain types of land are public property, and hence the ecosystem services provided by this resource are implicitly public resources. Public resources, being non-excludable, are subject to overuse and degradation. In order to limit negative externalities and improve allocative efficiency, market intervention is required, enacted through a management authority. Catchment Management Agencies, enabling the devolution water resource management to the local level facilitate broad based user participation and are intended to manage the resource towards this end. This study produced several key recommendations, listed as follows:  CMAs should progressively endeavor towards increasing raw water use charges and to improve cost recovery.  Water resource management activities currently assigned to the DWA regional offices need to be itemized in detail and ring-fenced to make it possible to determine the current expenditure on water resources management.  A handover schedule needs to be developed to determine an order of priority for water resource management activities to be transferred to the CMAs.  A cost benefit analysis of the various CMA functions needs to be undertaken to identify which specific functions will yield the greatest benefit for the given level of expenditure.  CMA budgets should be set relative to expected revenue  Establish a contractual obligation between water resource users and their corresponding CMA, detailing services offered and the corresponding charges
Date Published:01/03/2014
Document Type:Research Report
Document Subjects:Water Resource Management/IWRM - Catchment Management
Document Keywords:Governance, Guidelines, Policy and regulation
Document Format:Report
Document File Type:pdf
Research Report Type:Standard
WRC Report No:2078/1/13
ISBN No:978-1-4312-0518-9
Authors:Pearce D; Crafford J; Burger A; Pedzisa T; Mitchell S
Project No:K5/2078
Organizations:Prime Africa Consultants
Document Size:1 760 KB
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