How will tariff reversal hit city?

2014-01-22 00:00

IT is still not clear how big a hole the reversal of the city’s commercial tariffs will leave in Msunduzi Municipality’s budget and how this will affect service delivery.

But the Pietermaritzburg Chamber of Business (PCB) has extended a helping hand, saying they would be prepared to help the city where they can.

PCB CEO Melanie Veness said yesterday it is difficult to tell at this stage how the reversal will affect the budget.

The Pietermaritzburg Agency for Community Social Action (Pacsa) said yesterday they believed the budget should only be marginally affected, because the munici­pality had not indicated in any of its draft budgets that it was going to charge R661,35 for commercial basic charges. This was only implemented on a particular interpretation of a letter from the National Energy Regulator of South Africa (Nersa).

The municipality misinterpreted the letter and double-charged on the MCB or net ampere charge. The national energy regulator, which is a legal body, has since ordered the municipality to reverse the tariff hikes, much to the relief of many small businesses in the city, who said the crippling tariff hikes would force them to close.

Veness said the municipality would have to re-calculate its budget. “It’s quite a complicated re-calculation. We look forward to engaging with them regarding the revised budget and will try to assist in any way that we can,” Veness said.

She added that PCB members have offered to assist with expertise. “For example, many of our factories have electrical engineers on staff, who could assist the team in electricity.”

Pacsa, which has long called for a review of the city’s tariff structure, believes this would be a good time to start. Julie Smith, head of research and advocacy at the NGO, said that tariff structures and the actual tariffs can be used as an instrument of re-distribution, affordability and equity.

“Some of us can give more with a tolerable level of pain. Some of us cannot. Some of us must give less. The Msunduzi Munici­pality did not take us into its confidence and discuss with us how we can use the tariffs to benefit our citizens; and what we were all prepared to do to achieve this,” Smith said.

She added that with the debacle over the past months and the municipality’s “apparent disinterest”, in representing the needs of its citizens in negotiations with Nersa, “we have lost an opportunity to see tariffs as a social justice mechanism; and instead appear to be selfishly fighting to pay as little as possible. We all have to come to the party; but the municipality needs to step up and lead this process to rebuild public trust so that we have the space to sit down together and work out what needs to be done,” Smith said.

The tariff reversal will be discussed at a full council meeting today.

Opposition parties who supported a proposal by DA councillor Mergan Chetty to reject the hefty commercial hikes at a meeting last October, all said they felt vindicated by Nersa’s decision.

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