Cost recovery at any cost?

Scarce financial, human and water resources are major constraints on the delivery of sustainable water supplies to the previously disadvantaged rural communities of South Africa. Of these constraints on sustainability, the scarcity of financial resources has received the most attention. During the period from 1994 –2000, the prevailing view in the South African water sector was that some form of cost recovery from the beneficiary communities was necessary to compensate for the scarcity of external funding. Cost recovery became to be seen as so central to sustainability that, in many schemes, it became almost an end in itself. However pronouncements during the local government election of 2000 regarding the provision of “free” water have called into question the appropriateness of cost recovery. This paper will step back from a detailed assessment of specific cost recovery methodologies and focus on the broad objectives and principles underpinning cost recovery on rural water schemes. It will ask whether the pursuit of cost recovery is really worth the cost given the changing political priorities (best illustrated by the recent promise of 6kl of “free” water) and evidence that efficient cost recovery severely reduces household consumption?