PMB tariff increases ‘could have been worse’

2009-04-06 00:00

Pietermaritzburg Chamber of Business (PCB) CEO Andrew Layman said the Msunduzi Municipality draft budget has been influenced by the desire to keep voters as the election approaches.

In a statement released yesterday, Layman said in terms of moderate tariff increases, householders may be pleasantly surprised.

He said a portion of the 25% increase proposed by Eskom is to be absorbed by the municipality itself. “The tariff increase for major users will thus amount to 20% — an increase that will nevertheless challenge large manufacturers, some of whom are already suffering the effects of the global economic downturn.

“The municipality is commended for its circumspect approach to rates,” said Layman.

As expected within the spirit of the new legislation, said Layman, the income expected from rates should not exceed the previous years’ by an unreasonable amount. Many municipalities, by contrast, have used the transition from the old law to the new to impose quite unrealistic increases, he said.

Layman said how the R400 million of rates income is to be attributed to various categories of ratepayers is still to be determined and some may still be in for a shock when the rate-randages are finalised. “The reality of a budget, which errs by being somewhat under-funded, is that the leeway has to be made up in the future.

“While capital project needs were assessed at a value of almost one billion rand, the budget provides for little more than 30% of this.

“This means that many needs are not going to be met in the ensuing year. But they will not go away. Among these are the upgrading required in the electricity network and roads, for example,” said Layman.

The chamber believes, he said, that in producing this draft the municipality has probably done the best it can under the circumstances. It is unsatisfactory in many respects, but these relate to untenable circumstances rather than poor budgeting, he added.

“We look forward to engagement with the municipal manager [Rob Haswell] in order to interrogate some of the detailed entries and make suggestions as to how some priorities may be re-ordered,” said Layman.

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