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Friday May 25, 2012

Joburg promises to sort out billing crisis in 5 weeks

The City of Joburg has given itself just five more weeks to finish sorting out residents' billing queries.

Finance MMC Geoffrey Makhubo said the city was "serious about customer centricity" for its 1 million customers and "we are on course to clear the backlog by June 30".

From July 1, the start of the new municipal financial year, all new queries must be resolved within 30 days, he said in the latest of the promises the council has made on fixing the billing mess.

"Service level agreements are in place to ensure that depart-

Tments and entities are held accountable for non-resolution of queries among themselves," said Makhubo. He was delivering his budget speech in the council yesterday. The budget was expected to be debated in the council today.

The city's budget for 2012/13 is R37.6 billion. This includes R33.4bn for operational expenditure and R4.2bn, or 11 percent, for capital expenditure.

The R4.2bn capital expenditure is the first part of the planned R100bn for capital expenditure to be spent over the next 10 years.

"This expenditure includes capital grants, loans, own investment and public-private partnerships. Over time, we would like to increase the proportion of capital budget to total budget," said Makhubo.

DA councillor Patrick Atkinson, the party's spokesman on finance, called the budget "dull and unimaginative and unable to begin to tackle the most pressing issues".

He said the R100bn over 10 years capital spending plan should involve more spending over the next three years.

Atkinson said Joburg needed to tackle youth unemployment, housing and the maintenance of infrastructure. He blamed poor revenue collection and a ballooning debtors' book for failure to address problems.

The council's focus this year is to stabilise its revenue.

The council has been badly hit by the billing crisis, which peaked with a court interdict in December, preventing the council from disconnecting residents for unpaid services unless certain legally required steps were taken first. The council is opposing this, claiming it can't afford to abide by its own laws on disconnections, and that revenue this year is substantially down.

Makhubo said: "Today we can say with confidence that Johannesburg is much stronger and our financial position is sound."

The budget includes the proposed tariff increases for services. The city runs subsidies for services to indigent residents, and Makhubo said an indigent household would pay about R410 a month in total for the package of services.

Overall, property rates go up 6 percent. Water, sewerage and sanitation services go up an average of 14.5 percent. Refuse removal is up 6.7 percent and electricity could go up 14 percent.

The council had to apply to the National Energy Regulator of SA (Nersa) for permission to increase the electricity tariff by 14 percent, as this is higher than the revised municipal increase of 11.03 percent approved by Nersa in March. Nersa said it was still considering City Power's application, and a public meeting is due to be held on this at Nersa's offices in Pretoria on Tuesday.

City Power told Nersa it wanted the extra cash to fund repairs and maintenance.

Makhubo said the city needed to invest in its electricity infrastructure to reduce the R1.2bn distribution losses each year.

That's a loss of about a fifth of the electricity that City Power buys from Eskom each year. City Power's annual report explains these as technical losses of R568m and material losses of R649m due to theft, vandalism, incorrect billing, non-billing, meter problems, and theft of SIM cards from the automated meters of large power users.

The Star

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