City of Cape Town to spend R4.4bn on water, waste

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Published Mar 31, 2019

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Cape Town - The City of Cape Town intends spending over half of its capital budget on water and waste efforts and boosting transport services with more money.

A draft 2019/20 budget tabled in council this week, with a proposed focus on crime, grime and housing, proposed a capital budget of R8.3billion and an operating budget of R40.7bn.

Deputy mayor and mayoral committee member for finance Ian Neilson said the council had worked hard to keep rates and tariffs as affordable as possible for residents while taking into consideration factors that impacted on the council.

“One of the things we had to face is that there’s a shrinkage in the consumer base... we are not selling as much as we used to - even though we relaxed the water restrictions, the sales have not bounced back to what they were before,” he said.

The biggest spend of the capital budget, R4.4bn would go towards water and waste, over R1bn would be spent on subsidising MyCiTi bus operations and road infrastructure and just over R1bn on safety and security.

A total of R862million would be channelled on energy and climate change-related projects, while only R829m would be spent on human settlements, despite a housing crunch.

The council, which has taken the National Energy Regulator of SA to court, wanting to be allowed to secure energy from independent power producers - has also allocated R12bn of its operating budget towards energy and climate change-related efforts. More than R8bn would also be spent on water and waste, over R3.6bn on transport and R3.45bn on safety and security.

Mayor Dan Plato said although more funding was allocated towards safety and security during the adjustments budget in January, more law enforcement officers and patrol vehicles were needed.

Plato said in addition to the 100 extra law enforcement officers announced this year, the draft budget would allow the council to recruit an additional 200 officers across the law enforcement, traffic and metro police departments.

According to the draft budget, ratepayers would be charged 9% more for water tariffs, while the fixed charge remained the same.

Electricity prices would go up by 8.8% and refuse removal would now cost 5% more.

“Through our distribution system we are able to contain costs effectively with regard to electricity, and citizens will not experience the full effect of that Eskom increase per bill,” Nielsen said.

Indigent citizens would now be able to consume 10.5 kilolitres of water for free, and properties worth less than R400000 with prepaid meters and which used less than 250 kilowatts per month would now get 60kW free.

On property rates, Nielson said 19% of residential properties would not pay rates because they were under the new threshold of under R300000; 42% would now have their rates decreased because even though they might have had an increase in their value due to the recent valuations, that increase had been less than the overall increase in value across the City.

Thirty percent of properties, he said, would now be paying increased rates of between zero and 10% and 26% of properties would pay increased rates of not more than 10%.

The council made changes to water restriction levels, reducing them from seven to five, and renaming them.

“So what is currently level 3 which we are operating on will become level 1 under the new system, but it keeps the same tariff band restrictions,” he said.

But the draft budget has raised doubts among some opposition parties and an alliance of civic groups.

ANC leader Xolani Sotashe warned citizens not to be “excited” about the budget, saying it was only an election ploy to calm residents before the rates would be increased steeply in the following financial years.

He said it was concerning that budget allocation for human settlements was reduced, and criticised the council for “failing to spend” the urban settlement grant from the national government over the last five years.

Stop CoCT said the draft budget was also a reflection of the pressure that the council had received from organisations such as theirs.

“However, fine electioneering is definitely at play here,” added spokesperson, Sandra Dickson.

Dickson said the effect of the water tariff changes would mean that it would increase from R12.85 for level 1 per kilolitre to the new level 1m which is R14.91 per kilolitre.

In percentage terms, this represented a 16% increase.

“This tampering with the block structure is a stealthy way to increase the water tariffs by 16% and calling it a 9% increase,” said Stop CoCT spokesperson Sandra Dickson.

She also noted that with regard to electricity, direct Eskom-supplied customers would still pay less than City-supplied customers.

The electricity levy was increased from R150 to R163.32

With recent property valuations having increased, and doubled for some property owners, Dickson said 15% of property owners might be hit with huge rates increases.

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