A contract must provide for a method by which the water services provider shall receive payment for its performance in terms of the contract and that method must—
| (a) |
provide an incentive for the water services provider to perform efficiently and effectively; |
| (b) |
take into account the requirement for a reasonable rate of return on any investment made by the water services provider in terms of the contract and that rate of return must— |
| (i) |
be commensurate with the risks involved; |
| (ii) |
be based on information provided during the procurement process; and |
| (iii) |
when based on a price index or on a cost of capital, be specified and based on one that is readily available from a reputable source and regularly published; |
| (c) |
provide for the periodic financial review of the method; and |
| (d) |
provide for the sharing of any financial benefit to be achieved by the efficient and effective performance of the water services provider. |
National Regulator for Compulsory Specifications Act, 2008
