City’s water mark-up ‘450%’

2019-01-28 16:47

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450% — that is the mark-up municipality is allegedly charging consumers for water compared with what Umgeni Water charges the municipality.

Representatives of Pietermaritzburg’s business community have slammed a plan by the municipality to raise water tariffs by 9,6% in the new financial year.

Pietermaritzburg Chamber of Business CEO Melanie Veness said that when one considers this, the proposal to increase water tariffs by 9,6%, a figure also well above inflation, is completely unjustified.

She spoke at a meeting held on Friday by the municipality to assess stakeholder views on its latest tariff increases.

The municipality also proposed a six percent increase in electricity tariffs, but indicated this may change as Eskom still had to hear the outcome of its request to the National Energy Regulator for a 15% increase.

The municipality also plans a range of new electricity charges which it did not charge before, such as for disconnecting and reconnecting electricity at properties.

Municipal officials said that the 9,6% was the increase passed onto them from Umgeni Water.

The tariffs might be reviewed, based on stakeholder inputs, before being presented to the city council for approval in the municipal budget.

Veness said water tariffs in the city would increase by about 50% compounded over three years with the proposed increase, as there was a 14,3% increase last year and 15% increase the year before.

“We always hear the increase above inflation is needed to fund water infrastructure, but there has been no change in infrastructure, leakages and poor service levels in this period,” she said.

“We believe water revenue is being used to cross-subsidise other services simply because there is no national water regulator,” she added.

Veness said with the national economy growing by less than one percent, how could businesses, who were the major employers in the city, afford to pay above inflation rate increases.

“Where does it [the money] come from? It comes from job cuts ... that is all we can do,” she said.

A representative from the municipality suggested a cost analysis be done on water to provide a better indication of a correct tariff.

But Veness said that was the proposal at last year’s meeting, and a cost analysis was conducted, and that was how the chamber knew about the up-to-450% mark-up on water tariffs.

Mike Greatwood, a water services manager in the municipality, said it would be difficult for the municipality to find the many millions of rands of additional revenue it would require to pay for its water, if it didn’t charge the 9,6% increase.

Somta Tools MD Allan Conolly said the easy talk of an inflation-linked increase of six percent in tariffs in fact represented a big competitive disadvantage for businesses in the city that export.

Somta Tools exports to 70 countries and employs 350 people.

He said they were lucky to be able to get annual increases of one percent or more for Somta’s products overseas in some developed countries.

How then was the company supposed to deal with the rates increases, he asked.

Read more on:    pietermaritzburg  |  water crisis

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