- Broker Directory
- My Tools
- News & Advice
- Market Trends
- Other GN Sites
The tariffs for water consumption in Abu Dhabi’s residential sector have gone up this month, although residents have to wait for the first invoices of the year to see the actual impact of this increase. Based on the new tariffs, water costs for expats could increase by at least 170 per cent at the present level of consumption. For UAE nationals, there will be an additional bill to pay where there was none earlier.
Is this bad news? Not quite. This could actually be a combination of good news and not-so-bad news. Such tariff rationalisations need to be reviewed from multiple angles: financial, economic, environmental and societal.
As Abu Dhabi’s economy grows, more resources are needed to support increased human habitation necessary for economic growth. These resources come at a tremendous cost and have serious environmental repercussions, especially in the UAE where nearly the entire potable water supply comes from desalination. It is also well known that the government heavily subsidises water and electricity costs in Abu Dhabi. Against this backdrop, higher water consumption means a bigger burden on the national exchequer.
Cheap resources also have a tendency to drive greater consumption, creating significant negative environmental impact in the for of greenhouse emissions that lead to climate change. Thus, this measure of sustainability is in the overall interest of the country, including financial, social and environmental performance — a rational tariff regime intended to reduce consumption.
An action in reduction
The government’s objective in increasing tariffs is twofold. While it primarily reduces the subsidy burden on the government budget, it also decreases greenhouse gas emissions by encouraging residents to minimise
actual water consumption. Both will directly enable freeing up of capacity to meet growing demand, without having to add significant generating capacities.
From a resource utilisation point of view, this is evidently good news, as true utilisation will slowly replace exploitation of an earlier cheap resource. Wasteful habits will change to sensible and need-based use. Before we analyse this transformation, let us examine its likely financial impact on households. In my estimate, an average household in Abu Dhabi comprising two adults and two children is likely to spend anywhere between Dh60 and Dh90 a month on water consumption. For villa residents this is significantly higher mainly due to the water requirements for landscaping.
Apartment residents are likely to add about Dh100-Dh150 a month to their water bills after the implementation of the tariff hike — that is if their water consumption habits remain the same and they do not take steps to mitigate this change.
This is not necessarily a significantly high financial burden in the overall context of the high cost of living. While residents will have to pay more for existing consumption levels, those who consume in excess of 700 litres a day could be charged higher rates. Although the exact rate for high-volume consumers has not been specified, it is likely to be higher than the Dh5.95 per 1,000 litres that will be applicable to all consumption below 700 litres a day.
The tariff rationalisation has been long overdue, delayed by the efforts of the authorities to support the community as they anchored themselves in the emirate. Moreover, the revised tariffs are still much lower than those in Dubai — by more than 20 per cent. Therefore, even with the hiked tariffs, Abu Dhabi residents will pay much less than their Dubai counterparts.
Moreover, a reduction in greenhouse gas emissions from desalination plants will lead to a lower rate of climate change, benefiting residents directly and immediately.
The good news is that residents can actively take measures to reduce the financial impact of the increased tariffs quite easily. However, in the absence of ready access to a water meter, households will not be able to know where their consumption stands on a daily basis — despite their efforts to limit consumption to 700 litres a day.
Unfortunately there’s no way to address this other than taking measures in good faith and reviewing your performance at the end of the month when the bill arrives.
So what can residents do to soften the financial impact of this tariff hike on their household budgets? If consumption habits remain the same, the current monthly water bills are likely to rise by a minimum of 170 per cent. But by taking small measures, this cost increase could easily be limited to less than 50 per cent.
Obviously, this means that consumption needs to be reduced by half. There may be some costs involved in doing so, but the unavoidable expenditures can easily be recovered in a few months’ time.
The zero-cost measures need to be implemented right away. These are almost invariably good housekeeping practices or a shift to a more sustainable lifestyle. These include limiting the duration of showers and use of bathtubs, and running washing machines only when they’re fully loaded. Another way is to use one-litre or half-litre bottles filled with tap water to flush the toilet. Using a bottle per flush will easily reduce water consumption by about 20 per cent.
Follow up with low-cost measures such as retrofitted faucets in kitchens and bathrooms and shower heads with ultra-low-flow restrictors. With the recent boom in sustainable development initiatives in the UAE and by the Abu Dhabi Urban Planning Council’s Estidama, such contraptions are readily available in the market.
Faucet restrictors that have a flow rate of 0.5 gallon per minute (gpm) — or 1.9 litres a minute — and shower head restrictors with a flow rate of 2.5 gpm or 9.5 litres a minute can be easily installed. The cost is usually recovered in a few months as they reduce water consumption by at least 50 per cent, and sometimes by more than 70 per cent, depending on the installation. Huge reductions can be achieved in a financially feasible manner and the restrictors need only a few minutes to install. These are applicable in both apartments and villas.
The remaining challenge concerns the landscaping water requirements in villas. While there are many costly technologies that require extensive retrofit works to reduce water consumption, my recommendation is to manually optimise water usage.
Having lived in a villa with an interesting landscape for several years, I have found it sufficient to water plants once in two days when the conditions are humid. This reduces my landscaping water requirements by 50 per cent during certain times of the year, without making an investment.
Although it may appear that the revised tariffs will make water costs in Abu Dhabi spike, a few simple steps can reduce this impact to no more than a 35-50 per cent increase in financial terms. Simultaneously, the actual consumption will be effectively reduced by around 50 per cent or more. Tariff rationalisation
is an important step to achieve triple-bottom-line impact. It is a good incentive for residents to be more responsible and take active steps to reduce water consumption, as it is likely that more such moves may be on the horizon.
Source: Sougata Nandi, Special to Property Weekly
Over 17 years, Sougata has helped reduce carbon emissions in excess of more than 200,000 tonnes. He was instrumental in accelerating an ICT-based energy efficiency programme in 2011 that continues to reduce carbon emissions by more than 5,000 tonnes a month across nearly 100 buildings. An Indian Institute of Technology alumnus, he has developed and implemented the region’s first Sustainable Development Policy for a diversified free zone operator in Dubai. His work has won him and his organisations several awards in recent years, including the prestigious Emirates Energy Award multiple times.