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The cash-strapped Polokwane municipality has decided to increase its service rates as it struggles to collect potential revenue.
Executive mayor Freddy Greaver said his council was under-charging compared to other municipalities of a similar size.
“We still took the economic, social and financial factors into consideration in determining the increases,” he said.
The hikes affect assessment rates (six per cent), electricity (11.03 percent), water (18 percent), waste water management (6.50
percent) and waste management (10 percent). All other tariffs would increase by six per cent, the municipality said.
The increases would take effect from July 1.
Greaver said the electricity rates hike was influenced by the National Electricity Regulator's decision to approve an increase of 13 percent by electricity provider Eskom.
The water increase was pushed up by higher costs as determined by Northern Lepelle Water, from which the municipality buys its water.
“It should be noted that the municipality is not passing the full increase to residents as we are cushioning over one per cent of the electricity cost,” Greaver said.
This would cause the provider to sell the electricity at a loss, he said.
Compared to other municipalities of its size it was suggested that Polokwane, also given its level of service, should have higher rates hikes.
“The comparison suggested that we must increase our water tariff by over 35 percent, but as a council we had to consider the plight of our people as well,” Greaver said.
The municipality believed the increase would help to raise and recover cost it incurred during the period it was under-charging.
It was also revealed that the council had appointed a service provider to recover debts from residents of Mankweng.
Greaver said it had identified remedial actions to be implemented to reduce losses to an eight percent in both water and electricity.
“We have already, through the losses management plan, metered all the high consumers of Mankweng and they are currently being billed,” he said.
“We are also physically auditing the entire water network, stock valves are being installed, meters relocated for accessibility, illegal connections legalised and debt management unit fully established.”
There was a need to improve rates collection from Seshego and the city cluster through accurate meter reading, data capturing and billing. The municipality was also moving to metered communal water connections.
“Once all of these actions are implemented, we are anticipating reducing losses by half in the next financial year and progressively to eight percent in the next three years,” the mayor said. - Sapa