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Unpacking the City of Cape Town’s R61.5 billion draft budget

In his draft budget speech Mayor Geordin Hill-Lewis said the poor state of the infrastructure network threatens the health, well-being and dignity of every person who lives in Cape Town. Picture: Leon Lestrade/African News Agency/ANA.

In his draft budget speech Mayor Geordin Hill-Lewis said the poor state of the infrastructure network threatens the health, well-being and dignity of every person who lives in Cape Town. Picture: Leon Lestrade/African News Agency/ANA.

Published Mar 31, 2022

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Cape Town - Mayor Geordin Hill-Lewis highlighted all the ways how the City of Cape Town intends to spend ratepayers’ money when he tabled the draft budget for the 2022/2023 financial year on Thursday.

Hill-Lewis made a point to spotlight safety, water and sanitation, infrastructure, transport and electricity during his speech to council.

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Capetonians are going to have to find ways to stretch their money as ratepayers will see their rates increase by 5.2%, tariffs on refuse will increase by 5%, water and sanitation by 5%, with an additional 1.5% specifically for expanding access to water to the poorest residents living in informal settlements.

The biggest increase will come from electricity.

Hill-Lewis said that because of Eskom’s 9.61% increase that was approved by the National Energy Regulator of SA (Nersa), “we are bound to a 9.5% increase in electricity tariffs this year”.

Here is how the City intends to spend its R61.5 billion budget:

Safety

“In my inauguration speech, I pledged to do more to protect our residents from crime and ensure we get criminals off the streets.

“We were elected on a pledge to make Cape Town safer by deploying hundreds more officers, and the latest crime-fighting tech. So I am very pleased to announce that in our very first budget, we are providing for 150 new officers and 80 new auxiliaries, for a total of 230 new officers in one year,” Hill-Lewis said.

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“We’re also starting a new protection unit for frontline staff and community facilities. Our investment this year will enable 24-hour operationalisation; increase training capacity; and offer support for neighbourhood watches and community policing.

“The second half of our pledge was for crime fighting technology. In our first budget, we are today providing for technology like body cameras and dashboard cameras for our officers, drone and aerial surveillance technology, gunshot-location pinning, and more CCTV.”

CCTV cameras. File picture: Matthew Jordaan/African News Agency (ANA) Archives
Picture: City of Cape Town/Supplied

“Through the Law Enforcement Advancement Plan (LEAP), we have, to date, deployed 1000 extra law enforcement officers, focused in the 11 worst hotspots in the city.

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“This investment is showing results, with violent crime statistics dramatically down in Cape Town, and with Nyanga and Kraaifontein dropping off the murder-capital lists that they have dominated for a decade,” Hill-Lewis said.

Water and sanitation

"We have pledged to do the basics better to ensure our residents can live healthy and dignified lives... The brutal truth is that the City has not sufficiently invested in maintenance, refurbishment, and replacement of our sewerage infrastructure.

“The poor state of our infrastructure network threatens the health, well-being and dignity of every person who lives in Cape Town,” Hill-Lewis said.

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The mayor said that the problems are extensive and require major infrastructure investment.

“On top of the R25-million we budgeted in January, we add another R24-million for jet vac vehicles to provide immediate relief to the number of blocked sewers and the length of time it takes to get them unblocked.

“Residents can expect more preventative jetting and clearing of the sewer system and faster responsiveness on sewer spills.

“As a first step towards fixing our water and sanitation infrastructure, and safeguarding our water resilience, we will spend at least R8-billion on water and sanitation infrastructure in the next 3 years, with R1.6-billion this financial year alone,” Hill-Lewis said.

“This amount includes R406-million for the replacement of the Cape Flats Main Sewer, R755-million for the replacement and upgrading of pipes on our sewer network, and R300-million for the replacement and upgrading of pipes on our water network.

“We will double our pipe replacement to 50 kilometres this year, and in 2023 we will double it again to 100 kilometres. We will spend four times more than we did last year on pipe replacement – not double, or triple, but quadruple.

“We are doing more to repair and upgrade pump stations and sewers, and moving ahead rapidly with major upgrades to wastewater treatment works.”

Clean Up

"Recognising the crucial importance of the city’s water resources for current and future generations, over R190-million over three years is budgeted for the rehabilitation of three of the City’s ecologically sensitive vleis — Rietvlei, Zandvlei, and Zeekoevlei.

“The vlei rehabilitation project will include environmental impact assessments, remediation plans, the careful dredging of pollution from the water bodies, and new weed harvesters,” the mayor said.

“A further R490-million will be spent on coastline rehabilitation, to ensure we look after Cape Town’s world-famous coastal resources for our children and their children.”

Rietvlei and its associated wetlands around the Diep River at Milnerton are a crucial element of the new consolidated Table Bay Nature Reserve. Picture: Bruce Sutherland/City of Cape Town

"Over the next 3 years, to make it easier for residents to keep their areas clean, we will spend R784-million specifically on the management of waste in informal settlements.

“To improve our overall waste collection service, R650-million will go to replacing our fleet of vehicles and equipment in the medium term,” Hill-Lewis said.

Infrastructure and growth

The mayor said that investments in getting the basics right is how they will make Cape Town an even more attractive place to do business, which in turn means more jobs and better livelihoods for residents.

“Our R7.8-billion capital budget will meaningfully enable economic growth with new infrastructure to support economic activity. We are also doing more to upgrade existing infrastructure.

“R50-million more is budgeted for maintenance in this financial year alone, which will see buildings being painted, community halls being repaired, playground equipment kept in working order, gardens and parks being tended, and carpets in libraries being cleaned.”

Load shedding

“Earlier this year we called on Nersa to reject Eskom’s application for a 20,5% increase in the price of electricity. Thirty six thousand Capetonians supported our call in just 48 hours, and we were the Metro that led the charge at the Nersa hearings in opposing these unjust, unaffordable increases.

“While they didn’t approve the full 20,5%, they did still approve an unacceptably high 9,61% increase.

“We know this is unfair and unaffordable, and it upsets all of us in this government that South Africans in general and Cape Town residents in particular have to pay so much for a service that isn’t even being reliably delivered,” Hill-Lewis said.

Candles on tables at a Wimpy restaurant in Durbanville. Picture: Henk Kruger/African News Agency (ANA)

“Many of our residents believe - I’ve already seen the TikTok video going around about this – they believe that the City can simply absorb the costs of Eskom’s increases. This is not true.

“Electricity bulk purchases accounts for one quarter of our entire budget. Absorbing the costs of these increases would bankrupt the City in a year or two, and make us unable to provide every other essential service our residents need to live in Cape Town,” Hill-Lewis said.

The mayor said that because of Eskom’s 9.61% increase, they are bound to a 9.5% increase in electricity tariffs this year — the City’s “only” tariff increase that is substantially above inflation.

“An increase over 9% is painful, and one that every metro in the country that has tabled its budget so far has had to make.

“Eskom’s unacceptably high increases in electricity prices are one of the two main reasons why we are so aggressively pursuing our independent power procurement programme,” he said.

“This will allow us to purchase electricity at a far lower rate than that offered by Eskom, and pass this saving on to our customers.”

R3.8-billion is set aside for capital expenditure in energy over the medium term, and the City is also spending R48-million in its initial push to end load shedding.

“[Additionally] R45-million over the next three years [will be spent] to enable and incentivise residents to self-generate and sell their excess energy to the City.

“Embedded commercial generators will no longer be compelled to be net consumers of City-supplied power; in fact they will be incentivised to be net producers.”

R1.2-billion will be spent on the refurbishment and upgrade of the Steenbras Pumped Storage Scheme, currently the City’s primary means of mitigating load shedding.

A further R10-million this year is allocated to ensure the first bid round of IPP procurement is finalised as soon as possible, the mayor said.

R3.8-billion is set aside for capital expenditure in energy over the medium term, and the City is also spending R48-million in its initial push to end load shedding. Picture: Supplied

Transport

R6.4-billion over the next three years is allocated for capital expenditure by the Urban Mobility directorate.

This includes R696-million this year alone for the South-East-Corridor expansion of the MyCiTi bus system, which will link Mitchells Plain, Khayelitsha and Philippi with Claremont and Wynberg.

Housing

R2.8-billion is set aside for capital expenditure on housing over the following three years, including for informal settlements upgrades, Breaking New Ground projects, support for backyard dwellers, and social housing.

Jobs and entrepreneurship

R424-million is set aside for investment promotion, and R181-million for direct economic incentives to attract jobs and investors to Cape Town.

R53-million is budgeted for upgrades to informal trading infrastructure and to improve the efficiency of the City’s permitting systems.

R55-million is allocated to the City’s Jobs Connect and Cape Employment Accelerator programmes focusing on work placement and skills.

The least well off

"Our social package amounts to R3.75-billion, which includes R1.4-billion in rates rebates and R2,3-billion for indigent relief.

“This will ensure that Cape Town continues to have the broadest free basic services reach of all the metros, with 40% of households receiving free basic water and sanitation, and 27% benefiting from free electricity on the lifeline tariff. This is compared to around 15% of households in Gauteng on these indicators,” Hill-Lewis said.

Homelessness

“Living on the streets without toilet facilities and proper shelter is not dignified for the homeless, nor the people living formally in the surrounding areas. This budget does more for homeless people and the communities around them.

“The City’s Care Programme to help people off the streets has been increased to R77-million in this budget. A further R10-million will go directly to increasing beds at shelters this winter,” the mayor said.

“And R142-million is set aside to operate and expand City-run Safe Spaces in the next three years.

“Our Safe Spaces programme provides secure alternative accommodation for the homeless and opportunities to find employment, move into formal accommodation, and, where necessary, enter into drug and alcohol rehabilitation programmes.”

Picture: African News Agency(ANA)

Public Participation

“I want to thank our ratepayers for their support of our vision to make Cape Town a flourishing and prosperous city.

“The significant commitments made in this draft budget are being met by modest increases on what we charge residents in taxes and service tariffs. But we know this is still a substantial burden commitment for our residents,” Hill-Lewis said.

“We will use this money to improve every one of our resident’s lives.”

Hill-Lewis added: “Cape Town can be this place, and this budget is one substantial step towards this...Ours is a vision of a Cape Town where people are prosperous, free, safe, and living in dignified conditions.

“Our draft budget and IDP are the means by which we will turn this promise of hope into meaningful action. I hereby table them in Council, and open them for public participation.”

Here is a more detailed look at the City of Cape Town’s plans, which are now open for public participation.

Cape Argus

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