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City of Cape Town's planned hikes for water, sanitation, electricity and rates


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City of Cape Town's planned hikes for water, sanitation, electricity and rates

City of Cape Town's planned hikes for water, sanitation, electricity and rates
Photo by Reuters

28th March 2018

By: News24Wire


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The introduction of fixed charges for water and electricity and a hefty increase in water and sanitation tariffs are some of the proposals for the next year in the City of Cape Town's draft budget, tabled on Wednesday.

The total proposed budget for the new financial year that starts in June is R49.1-billion, made up of an operating budget of R39.7-billion and a capital budget of R9.3-billion.

Mayoral committee member for finance Johan van der Merwe said the drought crisis had had the most impact on the proposed budget, alongside affordability and financial sustainability.

The City was proposing a 26.9% increase in both water and sanitation tariffs, 8.1% for electricity, 7.2% for rates and 5.7% for refuse tariffs.

Officials stated that there had been a reduction in income as a result of residents using less water during the drought, and many households reducing their energy consumption.

"The City makes no profit from the sale of electricity, water, sanitation provision or from rates income," said Van der Merwe.

"Whether you use more or less, it costs the City the same to provide it."

Water charge to range from R56 to R22 500

Like other municipalities and countries, the City wanted to introduce a fixed charge for water, based on the size of a household's water metre, in addition to charging them for whatever water was used.

The fixed charge was to cover the costs of reticulation/supply.

"Most domestic dwellings have a 15mm pipe size. Based on that they will have a R56 charge [per month excluding VAT]," said mayoral committee member for informal settlements, water and waste services and energy Xanthea Limberg.

The largest metre size of 300mm would incur a R22 500 charge per month excluding VAT, if implemented.

"It's important to note that even though it may appear to be completely new within the context of Cape Town, this fixed charge has already been introduced in multiple municipalities in the Western Cape and in South Africa," she said.

Where the City had stepped its water tariffs in six categories, it now wanted to reduce them to four categories (with the first step being 0-6000kl use and the top step being any usage above 35kl).

Reduced energy consumption

With electricity, there was a proposal for homeowners with properties valued at R1-million or more to pay a new service charge of R150 per month including VAT.

This service charge was to cover the maintenance of the network and investment in wires.

These homeowners would be placed in a new category called the "home user" and subject to slightly lower energy rates than the "domestic user", whose property was valued between R400 000 and R999 999.

The "lifeline user" would remain a category for those with a property valued at less than R400 000. Other exceptions for indigent, disabled and rebated tenants also applied here.

"As we are seeing a greater uptake of renewable energy, customers within the domestic band have slowly reduced energy consumption and this has placed a burden on the municipality," explained Limberg.

She said there had been an almost 3% drop in revenue from electricity services as a result.

Mayor Patricia de Lille announced some of the City's most significant projects during her budget speech. These include:

- R235-million for the dark fibre broadband infrastructure;
- R135-million for electrification;
- R5-million for CCTV installations;
- R21-million for cemetery developments;
- R12-million for sport and recreation facilities upgrades;
- R240-million for congestion relief projects;
- R105-million for land acquisition.

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