Durban - The eThekwini Municipality is hiking the electricity tariff by 12%, partly because of lower-than-expected revenues from rolling blackouts and energy-saving measures by some of the city’s 700 000 power customers.
Property rates will increase by 6.9%, while water tariffs will go up by 9.5% for residential customers and 12.9% for businesses.
Sanitation and refuse charges will rise by 7.9% each.
City manager S’bu Sithole said some residents had also curbed electricity use, leading to a reduction in further revenue from municipal electricity sales.
But as a result of load shedding, the city was now collecting about R120 million less a year in electricity sales.
According to an eThekwini budget presentation booklet, rates and service charges (including electricity and water) make up almost 70% of the city’s total revenue.
Of the total 67.7% raised from rates and services, electricity charges provide the largest chunk of income (about 35.6% of income totalling R11.8 billion). This figure is projected to increase to about R14.7bn by 2017/18.
The city said the latest electricity tariff increase was “reflective of an appropriate balance between the interests of poor households, other customers and ensuring the financial sustainability of the municipality”.
Sithole said while Eskom tariffs had been increased by 14.24%, eThekwini’s increase of 12.2% was in line with the 12.2% tariff hike that had been recommended by the National Electricity Regulator (Nersa).
“Any cut in tariff may result in reduction of the salaries and repairs and maintenance budget,” said Sithole.
Eskom’s move to increase its tariff by 14% was another reason the city had to dig deeper into consumers’ pockets.
Sithole said Eskom’s pending proposal for a 25.3% increase would lead to “economic disaster” and the city would lobby at the highest level of state to oppose it.
He was speaking at a media briefing at the city hall to unpack the city’s 2015/16 annual budget of R39.1bn.
Sithole indicated the city would join forces with Cosatu in the fight against further Eskom tariff hikes as this would “kill” the city’s businesses, destroy jobs and reduce prospects for economic growth.
“We want to really vehemently oppose that move because we understand that its impact is going to be felt not just by the poorest of the poor, but it will also have a direct impact on business,” said Sithole.
He hoped Nersa and the government would be “extremely sensitive” in handling the Eskom request.
Not alone
“By the way, we are not alone. We are engaging through the South African Local Government Association. I think that through mayors we are already making representations at the various levels to say Eskom must look at another level of funding.”
The municipality had also increased rates by 6.9%, he said, noting that the major reasons were to service debt and for salary increases.
A R1m house in Westville would probably have its monthly rates increased from R764 to about R814.
IFP councillor Mdu Nkosi said his party supported the budget, but was concerned that electricity and water had become expensive and unaffordable to the poor.
He also lambasted the mayor for leaving out youth unemployment from his speech. The municipality should consider employing young people as city security guards rather than employing military veterans, who were probably “too old” to protect city assets.
The DA has rejected the budget because of high expenditure and expensive rates.
The Mercury