Tariff changes pledge

2012-09-12 00:00

A MASSIVE tariff overhaul is on the cards for Msunduzi, according to city boss Mxolisi Nkosi.

This will include a review of the much maligned MCB (mini circuit breaker) charges as well as the cost of electricity, water, sewage and waste collection in the city.

The overhaul could see Mzunduzi, eThekwini and Mkhambathini (Camperdown) having the same tariffs for water and electricity.

This would allow development along the Pietermaritzburg to Durban corridor and prevent companies migrating to Camperdown or Pinetown where they find tariffs more affordable, Nkosi told the Pietermaritzburg Chamber of Business (PCB) yesterday.

He was addressing business on the progress made in addressing the city’s electricity challenges.

PCB chief executive officer Melanie Veness said business was very concerned about the competitiveness of the latest increases and what it was doing to their bottom line.

This, combined with the constant power outages, was causing major production losses and high levels of frustration in the city.

She said Pietermaritzburg was losing industries that wanted to move elsewhere.

“A number of businesses are threatening to go to Camperdown,” Veness said.

Nkosi said that in the South African Cities Network Forum there has been talk of city regions. For example Johannesburg and Tswane have more or less the same tariffs.

Similarly, Msunduzi was entering into negotiations with Mkhambathini and eThekwini about not competing with each other.

He said the outcome could be that the grass would be greener for some categories of business, but not for others.

Nkosi acknowledged the dissatisfaction over the city’s recent tariff increases and said this was because of erratic services.

“If the services are good then people don’t mind paying, and we are working hard to get this right,” he said.

Mark Blomeyer asked about the MCB charge, which has long been an issue of dissatisfaction for Pietermaritzburg residents.

MCBs were introduced more than 30 years ago, to help residents control their use of electricity. It soon became a permanent fixture on bills.

Nkosi said the tariff committee would be reviewing the MCB charge as part of its work.

He said the terms and conditions of the tariff committee were approved at last week’s Msunduzi Executive Committee (Exco) meeting.

The tariff committee would focus on sustainability and would re-examine the incentives offered to business that were taken away when the city went into administration. Nkosi added, however, that the incentives would not be automatically reinstated. Instead there would be a review of their impact during a process of tariff modelling.

Property developer Richard Kelland, referring to a report in last Monday’s Witness which noted that changes were made to rates and water charges by national government, said that tariffs should be based on local sustainability and not on “nebulous” statistics from national government.

DUCT’s Dave Still cautioned that there was a need for national benchmarking, otherwise municipalities could set tariffs too low, leaving no money for maintenance — a situation that many municipalities were currently finding themselves in.

Still said restructuring tariffs was firstly a technical exercise and then a political exercise.

Nkosi tried to assure those present that the tariff re-structuring would involve extensive consultation with both business and residents.

He said that to sort out its electricity infrastructure problems, Msunduzi had entered into an agreement with Eskom and eThekwini, which were currently helping the city.

The upgrade of the Hilton line was on track and expected to be completed by December. Once this was done the municipality would focus on improving the electricity supply to the Willowton industrial area.

Nkosi also acknowledged the problems at the call centre and the frustrations of residents who tried to phone city hall.

He said the municipality was committed to opening up channels of communication. “When you call our centre you get no feedback. We are looking into this and what people are saying. We will be getting recording equipment for the centre to be able to verify and check on calls.”

Nkosi said the recent spate of outages that hit the city and the delays in repairs were the result of increasing demands on the repair teams, coupled with more problems as a result of the crumbling infrastructure.

The city’s long history of poor maintenance “has come back to bite us”, he said.

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