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Damaged businesses in eThekwini could cost city R500m in lost rates

An overview of the damages caused by recent floods in KwaZulu-Natal. Picture: Doctor Ngcobo/African News Agency(ANA)

An overview of the damages caused by recent floods in KwaZulu-Natal. Picture: Doctor Ngcobo/African News Agency(ANA)

Published May 19, 2022


DURBAN - A PRELIMINARY report on the storm damage in eThekwini has revealed that the municipality could lose R500 million in property rates revenue if damaged businesses are not rebuilt.

City officials said they were concerned about the impact of the damage to the “backbone of the city’s economy”.

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The officials briefed councillors during a special council meeting yesterday.

City official Bongumusa Zondo, who leads the committee responding to the disaster, said a lot of work had been done to try to restore normality, and more work still needed to be done.

He tabled the report, which showed that 1 152 businesses had been damaged. The report showed that the valuation roll properties that were at risk were valued at R7 billion, and the annual rates income value that was at risk was R513.2m.

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It revealed that some businesses could take up to three months to open, and 41% had not been able to reopen – many need capital to replace equipment and stock.

“All of our industrial areas were highly affected. If these properties are no longer able to pay rates because they are destroyed, we are losing income.

“But maybe that is not the worst – the worst is that if those companies cannot recover faster, it means we are losing jobs. The entire effect is that some of these people who are employees are supporting families not only in eThekwini,” he said.

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He said that as things stood there were 635 000 jobs at risk, and close to 8 000 jobs were said to have already been lost because of the floods.

It said that damage to stock and property was said to be R20bn, and that between April and December, business could lose up to R5bn in production.

He said the storm damage required that the budget tabled for the 2022-2023 financial year be re-prioritised, and that the borrowing that had been catered for this draft budget be increased by R500m. This means the city might need to borrow R1.5bn in the next financial year.

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The report also touched on the damage to private property following calls by opposition parties who said the city should assist as it was its infrastructure that had failed in some instances. The report read that it was common cause that the April 2022 floods were a natural disaster and that eThekwini does not have cover for residents for such incidents.

DA councillor Nicole Graham said it was unfair to say the council was not liable, as it had compromised infrastructure that had exacerbated the damage.

Patrick Pillay of the Democratic Liberal Congress said thousands of residents were still caught between a rock and a hard place when it came to getting disaster relief, as not all were served equally.

IFP councillor Mdu Nkosi called on the council to develop a programme to search for those who were still missing, in order to help families get closure.

EFF councillor Vukani Ndlovu said they welcomed the report, and were grateful for the work officials were doing.

He raised the issue of food being provided to people living in shelters, saying it was insufficient.