MSUNDUZI mayor Mzimkhulu Thebolla has dismissed concern from opposition parties and ratepayers’ organisations that the city is charging struggling consumers excessive tariffs.
The municipality has come under fire for its tariff structure. The opposition has argued that residents and business need to be allowed to recover financially from the devastating period of the Covid-19 pandemic and the July riots.
Councillors yesterday held a workshop to discuss the tariffs and other budget-related items. Last month the municipality tabled its draft budget for the 2022-2023 financial year. It recently went through a public consultation process.
The report on the tariffs that was put forward last month showed that rates would increase by 8%, water by 6%, refuse by 5.8%, sanitation by 9% and electricity by 9%.
Under “other miscellaneous”, the municipality said it would increase these tariffs by 12.4% in the next financial year.
Thebolla said that for the past few years the municipality had been charging low tariffs.
“’For tariffs for water and electricity we charged whatever the supplier charged us without taking into consideration our cost of providing that service.
“Even this financial year, we have taken the decision that the tariff for water and electricity, we will charge whatever the supplier charges us. Immediately that means we are operating at a loss,” he said.
He added that the council had considered adding a mark-up on electricity to cover its costs and for infrastructure rehabilitation, which would have pushed the tariffs to 18%, but decided against that as it was mindful of the challenges that people were facing.
The council said the processes relating to the approval of tariffs was aligned to the approval of the budget.
It said the proposed increase for water was modelled around a cost-reflective process undertaken by the water department. The bulk purchase increase applied by Umgeni Water was factored into the calculations informing the proposed increase.
“The proposed increases for the remaining departments have also taken cost-reflective principles into consideration,” it said.
Anthony Waldhausen, the chairperson of the Msunduzi Association of Residents, Ratepayers and Civics (MARRC), said they strongly opposed the proposed increases.
“The current economic situation points to sound reasons for the development of creative ways to mitigate any further negative impact upon the livelihoods of residents,” he said.
ACDP councillor Rienus Niemand said his party did not support the proposed tariff increases. The unemployment rate, said Niemand, was at record highs, and the way to address this was to allow the private sector to grow by taxing it less.
“The theft of water and electricity has increased exponentially with no effort by the municipality to stop it.”
DA councillor Ross Strachan said tariffs must be cost reflective.
“It is abundantly clear that the ANC in Msunduzi has created this trend of increasing tariffs annually to cover for their inability to govern.”
He said the stakeholders and residents of Msunduzi should come out in their numbers to object to this crippling proposal.
He said the DA would stand firm and oppose the Draft Budget in its current form as it did not speak to their demands, the priorities of basic services and the maintenance of the city’s infrastructure.