Instead of a regular faucet that switches on and off, picture a large metal meter box with a slot for a plastic card and a water tap below. The device requires consumers to pay for water before consumption by purchasing a prepaid card. Consumers can then draw water from the meter by inserting the prepaid card into the meter and collecting the water in a portable container. As service is delivered, the balance is adjusted, and the remaining credit displayed. Service is automatically terminated if the payment balance is depleted until the consumer can pay again.
The service is most prevalent in South African municipalities including Thabanchu, Mossel Bay, Ladismith, and Cape Town. Prepayment meters can also be found in Namibia, Swaziland,Tanzania, Brazil, Nigeria, Curacao and probably other countries, as well. The devices were previously used in the United Kingdom (U.K.) until they were declared illegal in 1998 for public health reasons.
As water becomes an increasingly scarce resource, global corporations, many governments, and international financial institutions such as the World Bank, argue that water should be allocated through market mechanisms. They argue for full cost recovery from consumers and enact policies to end public subsidies, a water lifeline or other social pricing policies that ensure universal access to clean and affordable water.
In many developing countries the lack of access to clean and affordable water contributes to the spread of water-borne diseases. More than 2 million people, mostly children, die each year from water borne diseases.
South Africa: A case study on the source of the cholera outbreak in the Madlebe Tribal Authority areas, uThungulu Region, KwaZulu-Natal province conducted in 2002 uncovered startling effects of the meters. According to the study, the conversion of nine, previously free water, communal standpipes to pre-payment meters, in the Ngwelezane/Empangeni municipality, resulted in many households being denied clean water supply. The conversion was equivalent to a water cut-off. In these areas, water cut-offs increased the vulnerability of communities to water borne diseases such as cholera. After the installation of prepaid meters in the KwaZula Natal province, 113,966 people were infected with cholera, of which 259 died, between August 2000 and February 2002. In contrast, during the previous two decades, from 1980 to 2000, 78 people died of cholera.
Research has confirmed that the increased incidence of cholera was as a result of the use of various cost recovery techniques including the installation of prepayment meters to replace FREE communal standpipes. Additionally, inadequate water and sanitation service provision exacerbates the condition of people suffering from immune deficiencies such as AIDS/HIV.
Increased cost recovery, water meters and especially the use of prepayment meters can divide neighbors from each other. A faulty tap in one’s own house was not a problem when neighbors could share water. When water becomes an expensive market commodity, social cohesion in neighborhoods and communities can be eroded. The result is that basic rights become privileges that are earned only by the depth of ones’ pocket.
Families are forced to decrease their consumption of water and to make difficult trade-offs between food, medicines, school fees or water
A large number of women, in the Ngwelezane/Empangeni municipalities, spoke of feeling humiliated because of problems in accessing water after the introduction of the prepayment meters. Many respondents described how they had to beg for water from neighbors because they had no money. This desperate need for water forced residents to resort to unpurified sources of water from the rivers and streams. The end result is simply the depravation of a basic human right to those most in need.
Governments and companies favor these devices because they ensure the collection of water fees and cut administrative costs. Unfortunately, this occurs at the expense of consumers. Benefits cited include:
- guaranteed cost recovery of up to 100% since water consumption is prepaid;
- substantial cost savings and recovery of capital expenditure especially in administrative expenses (example: billing and collection)
- disconnection of water supply is carried out by the consumer (known as ‘self- disconnection) instead of by the companies, since service automatically terminates once funds are depleted
- reduced water consumption of up to 65%
- quick detection of water theft or leaks
- adaptable to urban and rural communities.
Prepayment Meters, known as Budget Payment Units or Trickle Valves in the U.K., were declared illegal under the U.K. Water Act of 1998. The Act outlawed the use of any device that cut off customers’ water supply due to insufficient credit on their prepayment cards, otherwise called "self-disconnection". The ruling was based on the premise that the provision of water is vital to public health.
Problems in the U.K. surfaced in 1992 when all major cities, other than London, noticed a rise in the number of cases of dysentery reported. Water companies were criticized for cutting off water supplies and failing to notify local authorities of these cutoffs, despite their statutory duty to do so due to the associated health risks. The medical and nursing profession argued that a clean water supply was essential for human life, hygiene and health. The government, at that time, agreed and openly acknowledged that disconnection should not be available as a means of recouping debt from delinquent domestic customers, simply stating, "… where the water is disconnected, the maintenance of good health and hygiene can only be put at risk".
The water companies installed prepayment meters to avoid legal responsibility for water cutoffs. According to their logic, consumers would "self-disconnect" when they were unable to pay. The Birmingham City Council challenged the legality of the prepayment meters. It was estimated that in Birmingham alone 2,489 "self-disconnections" had resulted from prepayment meters in a short period. It was this and other challenges by affected municipalities, which led to the passage of the 1998 Water Act that declared the prepayment meters illegal.
The major providers of prepayment meter devices include Atlantic Meters, Conlog, Meinecke Meters, Actaris and Bateman.
Atlantic Meters (Pty) Ltd., part of the British privately owned Atlantic Group, was established in 1997. It is involved in both the provision of traditional and prepayment metering within South Africa and other developing countries. The company has also targeted markets in Africa and Latin America with pending contracts with Namibia, Curacao, and Brazil.
Conlog was founded in 1965. It is a designer, manufacturer and marketer of prepayment electricity, water and solar metering systems. It acquired the Bambamanzi group of businesses, Africa’s largest prepaid water metering company. In 1999 it was responsible for the installation of over 500 community prepayment standpipes throughout Thabanchu. The adjacent municipality of Botshabelo Masepala also placed orders. At that time the company also set to target more than 70 developing countries in Africa, the Middle East, Far East, Europe and South and Central America.
Actaris is a worldwide provider of meters, systems and services active in all utility sectors: electricity, gas, water and heat. Actaris is the largest provider of meters and systems. In 1999, Schlumberger RMS in conjunction with North West Water Limited (NWW), were contracted to deliver more than 280,000 domestic water meters to the United Kingdom.
Meinecke Meters secured one of the world’s largest water utility development contracts from Brazil.
BATEMAN provides services in mining, minerals and metals processing, gas compression and crude oil refining and water, sewage and effluent treatment, among others. It is the provider of the award-winning AquaNovo prepayment water metering system.