In November 1996, the Greater Hermanus Water Conservation Programme (GHWCP) was formed. In the course of its first three years the GHWCP drew widespread acclaim as a model for water conservation and sustainable development. The programme was based on a partnership between the Working for Water Programme, based in the Department of Water Affairs and Forestry (DWAF), and the Greater Hermanus Municipality. The genesis of the GHWCP was the increased tourist inflow into the small coastal town of Hermanus, 200 km east of Cape Town. At peak season, the population of the municipality increased from 19,000 permanent residents to some 60,000. The situation was bound to place considerable pressure on scarce water resources. As a result, the municipality applied to the Water Court to increase the capacity of the local dam but the application was rejected because the problem was assessed to be on the consumption side. In response, the municipality worked with DWAF to develop what at the time was the most comprehensive demand management system in South Africa. The GHWCP had a number of components. Central to the programme was the notion of block tariffs. While Hermanus previously had a block tariff system, the GHWCP approach put in place a much more progressive structure. The block tariff was combined with the removal of alien vegetation carried out by the Working for Water programme. The GHWCP also carried out education to make the population “water-wise”, set up model gardens using “grey” water, and assisted the municipality in developing more informative billing systems. In the first three months, total water consumption fell by nearly a third and water revenue had increased. This statistical profile was sustained throughout the three-year life span of the initial phase of the project. By 1999 water consumption had fallen by 32% and water services revenue had risen by 20%. The Working for Water programme had succeeded in removing a considerable amount of alien vegetation and had created more than 200 jobs in the process. The International Labour Resource and Information Group (ILRIG), in conjunction with the South African Municipal Workers Union (Samwu), conducted research on behalf of the Municipal Services Project identify lessons learned that could serve for other parts of the country. Surprisingly, a contradictory tale appeared. The historically disadvantaged communities in Greater Hermanus – Hawston, Mount Pleasant and Zwelihle – provided a much less rosy picture. In these townships, residents knew little about the efforts of water conservation. The changes they recognised in water service delivery were that more people were being subjected to harsh punitive measures for non-payment: water cutoffs; repossession of property; even the selling of houses that the resident apparently “owned”. Interview after interview in these communities told the story of a municipal administration that was “not interested” in the economic problems residents faced in meeting their payment for services. If lowered consumption and increased revenue come at the expense of a large number of people going without water, a programme cannot be viewed as a success. While block tariffs have the potential to advance water conservation and generate some income for local authorities, they are not sufficient on their own. Increased funding from central government is an absolute necessity if millions of impoverished South Africans are to gain and maintain access to basic services.