Cape Town rates bills set to rise by 10% on 1 July 2015
Category Cape Town
Recognising that residents are "under strain", the City of Cape Town has adjusted its property rates increase for the 2015/16 financial year to 10 percent, down from the 10.83 percent proposed in its draft.
But consumers will have to dig deep for basic services as tariff rises for electricity, water and sanitation are above inflation.
"In terms of electricity, we also have to buy electricity from a national supplier, Eskom, which has placed a premium on bulk purchases due to its own mismanagement.
"We have no choice but to pass off some of that cost to the consumer.
"If we did not, we would not be able to pay for even the most basic of services," Mayor Patricia de Lille said in her budget speech.
Electricity costs will go up by an average 10.82 percent when the new tariffs come into effect from July 1. This means a domestic consumer using more than 600 kWh, who paid 163.87 cents per kWh, will from July pay 187.73 cents per kWh.
Other rates and tariffs increases are:
- Water - 11 percent
- Sanitation - 11 percent
- Refuse - 8.33 percent
- Disposal - 9.31 percent
The proposed increases were slammed by the ANC and other opposition parties at its pre-budget briefing. "We don't support these increases because they will be hugely unaffordable," said ANC deputy whip Peter Gabriel. "Electricity will become unaffordable for the majority."
He said the city could soften the blow by using its 10 percent electricity surcharge as a buffer to offset the National Energy Regulator's proposed bulk tariff increase.
Gabriel also challenged the city's allocation of R260m for an electricity head office.
De Lille said the city had to review its "imperfect funding models" as it struggled to meet an ever-increasing burden of demand for services.
After considering public comments during the participation process, the city yesterday approved a total budget of just over R38.1 billion, with R32.1bn going to operating expenses and R6bn for capital projects.
De Lille said the budget would address the following concerns that emerged in the past financial year:
- R50m for additional security at city facilities
- More than R40m to improve procurement capacity and speed up the release of city assets
- R15m for overtime costs in safety and security, and R33.4m for additional staff
- R15.7m for critical social development functions
De Lille devoted part of her budget speech to the concerns raised by lobby group the Social Justice Coalition (SJC) during the public participation period. The group has alleged that the city was spending only R20m on informal settlements. But De Lille said the 2015 budget included operational expenditure on services to these areas of R481.7m. The total budget spend, including capital expenditure, is R503.7m.
The lion's share of the 2015/16 budget will go to water and sanitation, with the following allocations including:
- R827.8m for electricity network infrastructure
- R113.5m for the Mitchells Plain wastewater plant
- R173m for janitorial services to informal settlements
- R80m to maintain the water network infrastructure
Allocations for Cape Town's transport include:
- R105m for the construction of MyCiTi Phase 1B feeder service bus stops
- R300m for upgrading sections of Strandfontein Road
- R46m for rehabilitation and upgrading of roads in Ocean View, Kommetjie and Imizamo Yethu
Human settlements' allocations include:
- R79.6m for backyard dwellers and informal settlements upgrades
- R75.7m for the development of District Six
De Lille said other "catalytic" projects included R2.3m to unlock the development potential of the Athlone Power Station site, and R191m for broadband infrastructure.
The budget also allows for basic services for residents who can't pay, she said. Those earning less than R3 500 a month, or with properties worth less than R100 000, qualify for free basic services. De Lille said the budget was designed "for all residents of the city".
But Gabriel said the city's utility services was the worst performer when it came to the poor. "Of the total budget, only two percent would be allocated to the upgrade of toilets in informal settlements," he said.
The ANC rejected the proposed "tale of two cities" budget that favoured affluent areas.
Source: Weekend Argus (Saturday Edition)
Author: IOL
