Msunduzi sticks to steep power hike

2013-05-28 00:00

THERE’S bad news for Msunduzi residents, whose pleas to the municipality to reduce its electricity tariff increase have fallen on deaf ears. The municipality is sticking to its 10% proposed electricity tariff increase. The budget was accepted by a special Executive Committee sitting yesterday, before it is finally approved at a full council meeting on Friday.

The municipality is passing the hike, even though it has not yet received approval from the National Energy Regulator of South Africa (Nersa) to go above the seven percent tariff guideline. Asked whether it was not acting prematurely, Chief Financial Officer (CFO) Nelly Ngcobo said they did not anticipate a rejection as they were within the benchmark of what most municipalities were requesting. However, asked what would happen if Nersa surprised them by denying the request, Ngcobo said they would cross that bridge if it was reaached.

According to the Nersa website, Buffalo City municipality had also asked for a 10% increase and in KZN, KwaDukuza had requested an 11% increase. eThekwini had originally proposed a 6,9% electricity increase, but after objections from residents, reduced the hike to 5,5% in its latest proposed draft budget, which is also due to be passed shortly.

Until last week, local residents were hoping for a last-minute reprieve on the electricity front. Business and residents argued that the tariff increases were above inflation and did not take into account the socio­economic conditions in Pietermaritzburg. The recent census showed that unemployment stood at 33% in the city and the average household income was R108 926 a year.

Unemployment Insurance Fund (UIF) claims in March this year were more than five times higher than in the same time last year. Economists say new UIF claims are a way of gauging retrenchments in an area. The Electricity Action Group (EAG) said the proposed hike would take residents backwards to having to use paraffin, candles and wood.

The other tariff increases accepted by Exco, which will also go for approval to the full council on Friday, are a 10% hike in the cost of water, and 5,5% on rates, sanitation and refuse removal charges.

Municipal manager Mxolisi Nkosi said that when the tariffs were revised, local economic conditions, input costs and the affordability of the services were taken into account. He said the tariffs were also set to ensure the financial sustainability of the city.

DA councillor Mergan Chetty did not support the approval of the integrated development plan (IDP) and the budget document. He said the documents were not in front of him, so he could not see what he was approving. Nkosi said it was the same document that had just been workshopped with all councillors at a gathering in Hilton. He said the documents were not presented yesterday because they were being printed, as changes had to be made after the National Treasury’s input last week. Mayor Chris Ndlela felt that Chetty was being contrary because of next year’s elections. He said it was the nature of the opposition to oppose anything supported by the ruling party.

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