Water Allocation

Because there is often not enough water of a desired quality to satisfy all the demands for its different uses, decisions have to be made on how it will be shared between the users and uses that demand it. This is the practice of water allocation. It is a key universal function of water management whose objective is to maximise the societal benefits derived from water. The societal benefits can be classified as economic, social and environmental, each with a corresponding principle - efficiency, equity and suitability respectively (DINAR et al. 1997). Economic efficiency is concerned with the wealth that can be generated from a river basin’s water resources. It requires that in deciding where to allocate a unit of water, the sector generating the highest returns will be prioritised. Social equity means that everyone has fair opportunities to access water resources. It also means that water for drinking and sanitation needs should be made available for everyone including the poor who cannot pay for it. The sustainability principle gives recognition to the environment as a user of water, with direct and indirect benefits for human beings and the ecological system.

One of the fundamentals of water allocation is that any form of abstraction, transfer, storage or other influences on natural stream has effects on the entire downstream river system (CAP-NET 2008). The water authority must carry out a system analysis (see also material flow analysis) to understand the entire river basin including the associated groundwater and how it affects the livelihoods and economic activities in the basin and vice versa. It is important to allocate water based on its availability and the demands inferred from the ongoing and planned socio-economic developments (such as population growth, and increases in households with improved sanitation). Water allocation projections provide an important planning tool for adapting to changes in the availability of water. An assessment of environmental water requirements is required so as to reserve a minimum flow to sustain ecosystem services (including water purification, and the actual continued flow of clean water).

For an allocation system to work, all water users (or at least the major users) should be identified, and registered along with their agreed share of water allocated for abstraction or storage (and the conditions that come with the allocation). This is the establishment of a permitting system for the purposes of implementing and monitoring the allocation system. The following are the characteristics associated with an effective permitting system (UNITED NATIONS 2000):

• It is time bound with legal certainty (see also policies and legal framework).
• Extreme conditions are described (such as droughts) where special rules apply.
• Fees are defined for different uses and volume categories.
• For each permit, the volume of abstraction, the abstraction rate and times, the point (geographical) of abstraction and source and the water use should be known.

Multi criteria are used to decide on allocation. The criteria make trade-offs based on the following issues: prioritisation by stakeholders; profitability and economic returns; reliability of supply; equity; sustenance of ecosystems. To assist water managers in this process, some decision support tools have been developed that generate possible outcomes of different water availability and allocation scenarios. The scenarios can then be ranked by basin stakeholders as an input to the decisions by the water authority.

The world over, water resources policy gives priority to the water supply and sanitation over other water use sectors, but in reality the allocation does not always fulfil this promise (BUTTERWORTH & SOUSSAN 2001). Water allocation plans should take into account the needs or plans for sanitation. Because allocation systems consider the intended use of water, the benefits of improved sanitation to the river basin (though for example reduced bacterial contamination of water) provide incentives for water authorities to give more water to this sector. This water is likely to be taken from agriculture and industry through demand management induced by appropriate tariffs (see also water pricing: fixed charge, increasing block tariffs and volumetric charge). For water allocation to be more effective in improving sanitation, it is important to demonstrate to water managers, the economic and ecological benefits of allocating more water to sanitation. On the other hand, planning for sanitation is more realistic when it is based on the water allocated. This may influence technology choice, towards for example water saving options or devices (see also optimisation of water use on 3 categories of Water Use section).