Farmers and Bank Battle Over Water Provision

Citrus and mango farmers are currently battling it out with Rand Merchant Bank (RMB) over the delivery of water for irrigation and household use from the Blyde Dam. RMB has twice cut off water supply to some of the farmers on the pipeline, the first time being on New Year's Eve, and the second time on March 2, 2005.

The farmers reconnected the water, and the manager of the Lower Blyde Water Users' Association occupied the control room to ensure that the water could not be switched off again. The dispute centres around a 155km pipe network that was designed to replace existing canal infrastructure that had previously supplied water to the farmers.

The earth-lined canal system was highly inefficient, losing more than 60 percent of the water by the time it had been distributed to all the farmers. After the initially projected construction costs increased to R60 million, the Industrial
Development Corporation withdrew from the project on the grounds that it was not sustainable, and RMB stepped in with a R138 million loan, with interest now standing at about R200 million, to build the pipeline.

In the initial impact assessment for the pipeline, it was estimated that the cost of delivering the water through a pipeline would be R830 per hectare per year. To recover the costs of building the pipeline, the price of water delivery has now increased to over about R4000 per hectare per year.

According to Jurie van Vuren, manager of the Lower Blyde Water Users' Association, the cost of the water itself is only about R250/ha/yr. Many of the farmers say they cannot afford RMB's price, and last year entered into legal negotiations with RMB to negotiate a rate that is mutually beneficial. However, this process does not appear to be getting any results, and RMB cut the water off to three farmers in a test case on December 31, 2004.

The water was reconnected in January after urgent court appeals, and an interim agreement between RMB and the farmers to pay R2000/ha/yr. This interim agreement also appears to be unsatisfactory to RMB as they cut off the water a second time. The issue went to the Supreme Court in Pretoria, where a judge heard the case on 15 March. He is expected to give a verdict on the matter this week. According to van Vuren, if the judgement goes against the farmers, RMB will be able to enforce any price on the transportation of the water. This would result in the loss of many jobs in the region.

Prior to the construction of the pipeline, the EIA (CSIR 1997) estimated that about 4000ha of land were cultivated using water from the canal system in 1997. It is now estimated that 6600ha are under cultivation, and there were plans in place to irrigate a further amount of land to grow sugarcane, if the cost of the water allowed it.

By Melissa Wray In Hoedspruit

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