From July, an average Grahamstown household could soon be paying well over R1 000 a month for electricity, and human rights organisation the Black Sash has warned that this will “squeeze the life and
breath” from households across the economic spectrum.
From July, an average Grahamstown household could soon be paying well over R1 000 a month for electricity, and human rights organisation the Black Sash has warned that this will “squeeze the life and
breath” from households across the economic spectrum.
With less than a week to the end of their five-year term, the Council’s goodbye present to Makana is a parcel of tariff increases, including a 20.38% electricity hike.
The Council sat down for their last meeting on Wednesday to approve a 15.6% overall increase in the capital and operating budget for the 2011/2012 financial year.
With the National Energy Regulator of SA allowing Eskom to raise their tariffs by 26%, the council has decided to pass on the cost to consumers, along with an increase of more than 8% each for other municipal charges.
Black Sash Provincial Advocacy Manager, Jonathan Walton, said a tariff increase of above 8 or 9% was “unreasonable” and would put pressure on any household. “It’s going to squeeze the life and breath from consumers in both rich and poor households,” Walton said.
One of the functions of Blash Sash is to offer the public consumer advice. “If they up the tariffs then the provision for the poor must also rise,” he said. Councillor Michael Whisson, one of two who opposed the budget (the other was fellow DA representative Les Reynolds) said the overall 15.6% budget increase would increase the burden on those who paid accounts.
Whisson believes that savings in other areas should have been made to keep increases in rates and service charges (other than electricity) to no more than 8%.
“The impact of the budget on elderly persons with fixed incomes, or who are dependant on no more than inflation-linked pensions, will be particularly harsh, unless they can successfully access indigent status,” Whisson said.
“Even allowing for the DBSA [Development Bank of South Africa] loan and essential improvements in the operation of the Department of Technical and Infrastructural Services, the overall increase in the budget for 2011-12 of 15,6% is excessive," he said.
He questioned the 20.38% electricity rate increase, also, in light of the fact that 27% of electricity paid for was not accounted for.
"We [Makana] pay Eskom, but that money is not paid over to us by the people who are using or losing that electricity." He said these losses amounted to millions of rands.
Whisson also blamed government departments for stalling on payments to the municipality. "The honest and compliant account holders of Makana are being asked to pay for the failure of government departments to pay their debts to Council," Whisson said. He said if they paid their large debts, this would lessen the financial pressure on the municipality.
Reynolds said that the increase would only worsen the debt situation and said the maximum overall increase should be no more than 9%. Reynolds said he would like the budget to be examined more and not put though just because the council's term was ending.
In reply to Whisson's and Reynolds's concerns, Makana Municipal Manager, Ntombi Baart said officials had read with "serious consideration" the National Treasury's guidelines for preparing a balanced budget.
She said the problem of water and electricity losses was covered by the audit action plan, in which activities such as data cleansing and a revenue-management strategy had been put in place.
Also in defence of the budget, Councillor Ntsikelelo Stamper, member of the Budget Task Team said the officials had done their job and had not thumb-sucked the figures.
The Mayor, Vumile Lwana, had the last word, saying, "The more we demand for a higher level of service, the more we need to have the ability to dig in our pockets."
Whisson submitted a motion against the budget, seconded by Reynolds.
Councillor Mxolisi Ntshiba then put a motion on the table in support of the budget and he was seconded by Councillor Julia Wells.
The ANC majority decision was to pass the budget.
THE NUMBERS
The tariff increases, which will come into effect on 1 July, are as follows:
Electricity: 20.38%
Water: 8.5%
Rates: 9%
Sewerage: 8.5%
Refuse: 8.5%
…AND WHAT THEY MEAN
* If you're paying around R700 a month for electricity now (useage only), you'll be paying around R850 for the same useage, plus R336 for your connection – R1186. If you're paying roughly R2 000 electricity useage a month, it will go up to just over R2400, plus R336 brings it to R2 736.
* Water useage costing you around R200 a month now will cost you R217 and the connection charge brings it up to around R315 .
* A sewage basic charge of R78.26 goes up to just under R85, plus your proportional charge, an estimation based on how much water you use.
* If you're paying R42.33 for refuse removal now, it will cost a little over R45.
WHAT'S MAKING THE BUDGET BIGGER?
The year-on-year expenditure increase in capital and operating budgets amounts to about 15.6% and these are some of the factors pushing it up:
• Budget vacancies amounting to about R4.9m;
• Inclusion of items such as a loan repayment amounting to R3m for year one;
• The approval by Nersa of an increase of bulk electricity charges of 26%. The increase in municipal tariffs is 20.38%;
• Increase in bulk water purchases;
• Formalisation of ervens, amounting to about R1.5m;
• Inclusion of a security tender, which will require R1.6m a year;
• Year-on-year increase in salaries of 8% across the board, along with an increase in the number of wards and councillors;
• Increase in the AFF-funded Capex impacts on the operational budget because depreciation costs must be budgeted for.
