eThekwini residents still in the throes of power and water cuts after a two-week municipal strike, must brace for a tariff hike outlined in a new draft budget unveiled on Tuesday.
The proposed increase — 14.9% for water, 14% for electricity, 12.9% for sanitation and 8% for refuse for the 2024/25 financial year — has been criticised by ratepayers and some opposition parties who say the hike will spell disaster for beleaguered ratepayers.
Mayor Mxolisi Kaunda announced the proposed increases in an urgent special council meeting on Tuesday when he tabled the draft budget for the 2024/25 financial year at the Durban ICC.
The proposed budget comes days after the municipality announced the end of a two week illegal strike by South African Municipal Workers Union members which saw thousands of households go days without water and electricity. Piles of refuse lay uncollected on streets.
The total proposed budget for 2024/25 is R67.3bn with an operating budget of R59.7bn and a capital budget of R7.6bn.
He said the city had to make “tough economic and fiscal choices” while drafting the budget.
Kaunda said factors such as high fuel prices and above-inflation increases of other goods and services had a “limiting effect on what could be done with the budget”.
Proposed hikes
He said despite this they tried to ensure that the tariff hikes were “reasonable” for residents.
The proposed tariff hikes are:
- 7.9% increase for property rates
- 12.9% for sanitation
- 14.9% for water
- 14% for electricity
- 12.9% for sanitation
- 8% for refuse
“The draft budget is constrained by a proposed Eskom tariff increase of 12.72% and an uMngeni-Uthukela Water Board average increase of 9.5%,” said Kaunda.
Zwakele Mncwango, ActionSA caucus leader, proposed the new water tariff should match the 9.5% increase of the uMngeni-Uthukela board and filed for an amendment to that effect.
“If we go as far as 14%, we are more than punishing the ratepayers of eThekwini for our loss because the city actually accrues more than 58% water loss,” said Mncwango.
“The question we should be asking ourselves as councillors here is ‘why do we punish ratepayers when we are not having our house in order?'”
Patrick Pillay, Democratic Liberal Congress councillor, said the water increase was unacceptable considering the supply challenges to communities.
He said the city was making promises it would deal with the issues of non-revenue water and water leaks every year, but the problem persisted and the ratepayers were the ones who suffered the most.
Above inflation increases
“This way above-inflation figures are going to be detrimental to our community and the ratepayers.”
The amendment failed, however, as it only managed to garner support from 83 councillors while 113 voted against it.
Kaunda acknowledged the problems facing the city but refuted the notion that the majority of citizens were not accessing services such as water and electricity.
He added there were many factors which led them to the water hike tariff they proposed, including the city's majority contribution towards R28bn earmarked for a new dam, which will contribute 75% of the city’s water once complete.
The draft budget was approved with 117 councillors in favour, while three voted against it and 60 councillors abstained, including the DA and IFP.
DA caucus leader Thabani Mthethwa said the party abstained because they understood the meeting was to approve the process of drafting the budget, which is a legislative requirement, to take it out for public consultation, but not to approve the draft budget.
“We will also be making our own amendments to what has been proposed in the budget,” he said.
The budget will be subject to public comment before final adoption.
Imraan Bennett of eThekwini Residents and Ratepayers Association (ERRA) objected to the tariff increases.
“It doesn’t equate with the inflation rate, which is at 5.1% so it’s more than double the inflation rate. It doesn’t sit well with all the ratepayers associations, it’s something we are raising an objection (against),” he said.
ANC councillor Nkosenhle Madlala said the municipality would take the consultation process seriously and was always ready to adjust the final budget to respond to their residents' views, as was the case last year, but warned that such reductions would affect the overall budget.
Kaunda also warned of the implications of reduced tariffs.
“When you reduce your budget is when you start failing to face the challenges of ageing infrastructure and other maintenance challenges facing the city.”
