eThekwini mayor James Nxumalo. File picture: Independent Media
eThekwini mayor James Nxumalo. File picture: Independent Media

eThekwini unveils service cost increases

By Sihle Mlambo Time of article published Apr 1, 2016

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Durban -Durban residents will have to tighten their belts after the municipality proposed water, lights and rates increases ranging from 6.9% to 12.5%.

The increases, which come against a backdrop of rising food prices, fuel price increases next week and likely interest rate hikes, have drawn sharp criticism from the opposition and an independent economist who warned that the hike “will kill people”.

Yesterday, the eThekwini Municipality tabled its R41.6 billion draft budget before a full council sitting, announcing that domestic water tariffs were set to increase by 12.5%, sanitation by 9.9% and refuse removal by 7.9%.

The electricity tariff increase, however offers some respite for homeowners: it is being kept to 7.6%.

This is despite a court ruling yesterday in favour of Eskom, allowing the utility to impose a 9.4% hike on municipalities

Last month, City Treasurer, Krish Kumar, assured consumers it would limit the electricity tariff hike to the 9.4% increase granted to Eskom.

However, there is bad news for businesses: a water tariff increase of 15.9% is on the cards.

The draft budget, for the 2016/17 financial year, which will be presented for public comment this month, comprises a capital budget of R6.7bn and an operational budget of R34.9bn.

The city said it had allocated R14.8bn of the budget to addressing infrastructure and household services backlogs and this would help boost growth in the economy.

It said more than R6.7bn would be spent on basic services in what it was calling a “pro-poor” budget.

Mayor James Nxumalo said the budget supported the government’s commitment to “broadening service delivery, attracting investors and expanding investment in infrastructure, while taking into account the constrained fiscal environment”. However, Durban economist, Professor Bonke Dumisa, said the increases were too high and came as the city was struggling to increase its rates base.

“Many of Durban’s residents will be able to pay begrudgingly, but many cannot even afford to pay,” he said.

“These increases will only increase the numbers of those who are not compliant.”

On the proposed electricity tariff hikes, he said electricity was being lost to theft and law-abiding consumers would have to pay for this.

Similarly, water losses were also costing honest citizens money.

“People cannot afford to pay more than 1% above inflation, some of these increases are above 8%. This will kill people because where will they get that money from when salary increases for most are under 6%,” he said.

He said if the budget was approved as is, it was likely that electricity theft would shoot up.

“It is an election year, the last thing any municipality wants to do is increase too much, 8% at most.”

Despite this, the municipality was still spending millions on funding entertainment.

“The municipality uses so much money for entertainment, right now the South African Music Awards that have always been in Sun City are coming to Durban and the rumours are it will cost R46 million,” he said.

More needed to be done to stimulate the economy, he said, calling on the province to help.

The DA’s caucus leader in the municipality, Zwakele Mncwango, said they were not happy about the budget and singled out the 15.9% water tariff increase proposed for businesses.

He said the city should be trying to market itself as a pro-business destination but instead appeared to be anti-business.

“Right now Durban is the most expensive metro to live in because of the high rates and our rates base is not growing.

He said unemployment was a crisis and the rates were high because many people were made to be dependent on the city.

“This model of increasing tariffs on business and giving to the poor only creates dependency, we need to give people a platform to grow and give them opportunities,” he said.

“When we charge business 15.9% and 12.5% for domestic use for water we are saying we are punishing you for being in Durban, we need to be more lenient to business to attract, because right now they are closing down while we spend money on events, Nicki Minaj and unnecessary overseas trips,” he said.

Mncwango said the budget was unlikely to be changed after public comments.

Daily News

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