14,3% water hike in July

2018-03-23 13:33
City disputes Umgeni Water tariff, moots 6%.

City disputes Umgeni Water tariff, moots 6%. (File)

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Msunduzi ratepayers could be in for another double-digit water tariff hike come July, as 14,3% has been proposed in the municipality’s draft budget for 2018/19.

Presenting the draft budget during Thursday’s financial services portfolio committee meeting, chief financial officer Neli Ngcobo said the City will be engaging Umgeni Water to get a reduction on the proposed tariff.

“As the municipality we are disputing that 14,3%. Infrastructure has written to the accounting officer so we can do a formal representation to Umgeni in terms of requesting those tariffs to be reduced,” she said.

She said once the City gets confirmation from Umgeni about the reduction of tariffs, then they will adjust the draft budget. “Our ... water department is making a submission, they want it to increase by 6,0%, whether that is going to be approved by Umgeni or not, we will know when we get their response,” said Ngcobo.

The proposed tariff increase for electricity is 6,8% and for property rates, sanitation, refuse and other revenue it is at 6,0%.

The councillors said all the increases, except water, are in line with the inflation rate. They, however, expressed concern that the City is not collecting enough revenue when it comes to water.

ANC councillor Thamsanqa Sithole described the proposed 14,3% increase on bulk water purchases as a “hot potato that is difficult to swallow”.

“We are acquainted of the fact that when the demand is bigger than the supply, the price is likely to go up, however we have experienced some heavy rainfalls around our region thus water levels in our dams have improved immensely. So we support the proposal to dispute the 14,3% tariff increase because water is a need and water is also a source of life,” he said.

ANC councillor Siphiwe Ndawonde said there seems to be lack of will to address the problem of water losses. In November, Auditor-General Kimi Makwetu said Msunduzi lost 29% of the total water purchased in the 2016/17 financial year which amounted to R109,2 million.

“Vulindlela and Edendale must be metered so that we don’t continue to have this problem of water losses,” said Ndawonde.

The 11 wards in those areas account for at least 24 000 water meters that are not being read and billed for, according to the tariff structure.

Pietermaritzburg Chamber of Business (PCB) chief executive Melanie Veness said Umgeni Water is looking to pass on a 13,7% increase to Msunduzi.

The water service provider submitted its application for this tariff hike to the former Minister of Water and Sanitation Nomvula Mokonyane in January.

Veness has since also written to Mokonyane expressing concern regarding the lack of consultation with the private sector and civil society regarding the setting of water tariffs and to object to Umgeni’s proposed tariff increase of 13,7%.

“I indicated to the minister, that by the time Msunduzi negotiates with us regarding their tariffs, the Umgeni increase is a fait accompli — we’re stuck having to fund it,” she said.

She said last year the ratepayers faced a 15% increase from Msunduzi on water tariffs that were already marked up between 353% and 462%.

She said unlike with water, when the electricity tariffs are negotiated, the private sector has an opportunity to have input regarding the Eskom tariffs, before they are approved by the National Energy Regulator (Nersa).

“Should the municipality propose to implement a tariff higher than the Nersa recommended tariff for municipalities, we are able to make our case at Nersa. We have been successful at Nersa on both occasions when we have had to object to proposed increases of this sort,” said Veness.

Veness is yet to receive confirmation as to what increase has been approved for Umgeni Water.

“But even if the full 13,7% is approved by the minister, this increase on the cost of water cannot be used as a justification for the application of a similar increase on the onward sale of water to consumers, because water is already marked up significantly by Msunduzi.

“It certainly cannot be used to justify an even higher one,” she said.

She said the water income is also not ring-fenced for water infrastructure, it is spent on operations, and so the ratepayers do not benefit from improved infrastructure at the higher tariff level either.

The draft budget will be interrogated by the full council on Wednesday before it is open for public comment.

Read more on:    pietermaritzburg  |  water

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