City cuts water price hike

2016-05-20 12:20

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Pietermaritzburg - Despite the crippling drought, the city has backed down on their plans to increase the cost of water by 27%.

Following recommendations from National Treasury, Msunduzi Municipality CFO Nelisiwe Ngcobo said the city will reduce the increase to 11,15% as Treasury felt consumers would be burdened by a high increase.

Ngcobo presented the draft budget for 2016/2017 to 2018/2019 to the city’s executive committee yesterday.

All other tariff increases would remain the same, with electricity at 7,64% and rates, sanitation and refuse at six percent should the budget be passed in the coming months.

The draft budget sees councillors get a raise of six percent. The annual salary percentage increase for Msunduzi employees would be slightly above inflation at seven percent.

National Treasury raised their concerns that the budget would only sustain the city for one year as there had been no growth in the municipality’s revenue.

Although the municipality emphasised their commitment to implement cost containment measures, Treasury highlighted that consultant fees and overtime costs were still very high and recorded drastic increases.

The draft budget included the absorption of contract workers.

This has been a contentious issue, which in past months has seen contract workers demand they be made permanent. The total cost for the absorption of contract workers will amount to R116 million.

Ngcobo commended her team for funding this without tapping into the city’s reserves, which was welcomed by the committee.

During the benchmark exercise with Treasury, it was found that 80% of the municipality’s budget was for the renewal of existing assets while the recommended norm was 40%. However, one of the priorities set by Msunduzi is the replacement of dilapidated infrastructure, Ngcobo said.

She said the city set priorities for the new financial year, which also include the capping of electricity and water losses and eliminating power and water theft.

Debt collection, implementing smart metering and eliminating meter estimations were some of the other priorities raised.

Overall the National Treasury found the draft budget credible and aligned to the Integrated Development Plan (IDP).


Read more on:    pietermaritzburg  |  msunduzi municipality  |  water

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