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Wednesday May 23, 2018

Durban rate hike plan defended

The eThekwini municipality says the economic climate, external financial pressure on services, increases in bulk charges and salary increases constitute some of the pressures influencing the implementation of major tariff hikes, set to hit residents in July.

The city has proposed a 6.84% increase for electricity, a 15% increase for water, 9.9% increase for both sanitation and refuse removal, and an increase averaging 6.9% for rates.

Residents have until the end of today to lodge objections to the draft budget before it is set to be tabled for adoption by a full council on May 31.

Any hikes that are adopted will be implemented from July 1, which is the start of the municipal financial year.

While the proposed hikes have been slammed by some residents was unaffordable, the city maintained that when setting the tariffs it had taken great care to ensure that they were "cost-reflective, affordable and sustainable for ratepayers".

"In setting the tariff the municipality has taken cognisance of the proposed tariff increases from both Nersa (National Energy Regulator of SA) and uMgeni Water Board of 7.32% and 13.7% respectively. It should also be noted that the salary increase impacts on tariffs. The proposed 7% increase has been rejected by one of the major labour unions," the city said yesterday.

Durban-based economist Bonke Dumisa said the increases to be implemented - if approved by council later this month - might become a huge burden for struggling residents.

Dumisa said "any increase above inflation plus 1% does not make sense".

"The municipality is already battling with revenue collection.

"While it should be acknowledged that there is a culture of non-payment, there are also those people who cannot afford to pay. Such increases will mean more and more people are unable to pay," he said.

At the weekend a WhatsApp message urging residents to object to the proposed tariff hikes was circulated.

"We must not complain but take action. So please object or we will be living in a South Africa only the wealthy can afford," reads the WhatsApp message.

Dumisa said the country was not only facing high unemployment rates but also the problem of a dwindling number of people considered wealthy.

He said he understood the pressures that the government was facing, and noted that there was a drive to implement financial austerity in government departments.

However, that drive to curtail expenditure did not seem to have filtered down to local government level, he said. "When councillors keep on voting to have monies spent on trips and on VIP protection for themselves, not to say that councillors should not be protected, this sends the message to residents that the money is there."

The Mercury


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