Water worry on low tariff

2016-06-06 09:45
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Pietermaritzburg - Has uMgungundlovu District municipality set itself up to run at a loss with a significantly “low” water tariff increase?.

Questions have arisen surrounding uMgungundlovu’s (uMGM) decision to increase its water tariff by 6,013%, with some warning the district will “run at a loss”.

DA Chief Whip and executive committee member for uMGM Rodger Ashe said he felt confident the district’s figures were incorrect.

With Umgeni Water supplying water to the district and surrounding municipalities, water tariff increases are dependent on the board’s increases.

Spokesperson for Umgeni Water, Shami Harichunder, said they will levy a nine percent increase for bulk potable water in the next financial year. He said the increase will be effective from July 1 and will be applied to water sold to eThekwini Metro, Msunduzi Local Municipality, uMgungundlovu District Municipality, Ugu District Municipality, iLembe District Municipality and Harry Gwala District Municipality. “If Umgeni is increasing its tariff by nine percent then my suspicions that something is wrong in the district calculations has been confirmed,” said Ashe.

Ashe said he raised the matter in the district’s executive committee and at full council meetings, questioning whether the figures were correct. “If this is the case from Umgeni and if the district is adamant their increase is 6,013% then the district is going to run at a huge loss,” he said. Ashe said water is the district’s biggest income and if there was a miscalculation “then they will be left worse off than before”.

“Bear in mind that the district has been told to stop being so grant-dependent,” he added.

uMGM executive manager for budget Nondumiso Mbatha said the council was made aware of the nine percent increase by Umgeni Water Board, but confirmed the district would implement a 6,013% increase.

“The [uMDM] has not denied nor hidden that the service is trading at a loss, but emphasis is on the improvement of revenue enhancement and revenue generation strategies,” said Mbatha. She said she did not believe it was fair to compare the Msunduzi municipality tariff increase to that of the district and said it would be “unfortunate” to assume the budget policies and assumptions for Msunduzi fit perfectly with uMDM.

Msunduzi municipality said it will be increasing the water tariff by 11,3% to residential consumers and 9,5% to industrial consumers.

The bulk tariff increase by Umgeni Water is incorporated into Msunduzi’s operating costs.

Msunduzi municipal acting spokesperson Nqobile Madonda said although uMDM has its own method of charging, Msunduzi’s opinion is that the increase is “too low”.

“It is too low to enable it to provide an adequate water service to its customers. By law our tariff charged should result in an income that balances out the anticipated expense of providing an adequate level of service,” said Madonda.

• kailene.pillay@witness.co.za

Read more on:    pietermaritzburg  |  msunduzi municipality  |  water

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