City council proposes 10.5% increase for bulk water purchases

Photo: sourced

POLOKWANE – Bulk water purchases for the Polokwane Municipality are to increase by 6%, in line with the National Treasury’s inflation forecasts, but the Polokwane City Council proposed a 10,5% increase in its draft annual budget for 2018/19.

This will increase projected revenue, down from an original budgeted revenue of R313,39 million in 2017/18 to an adjusted R220, 85 million in the adjusted budget, to a budgeted income of R248,45 million in 2018/19.

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Review last year reported on at least 64 water stoppages in the city, notice of which was given by the municipality, where water was not supplied to various areas, especially high-lying areas in the city, for periods ranging from a few hours or days, up to two weeks at a time.

This must have led to a serious loss of income for the municipality due to people not being able to use water because there was no water available as the result of pipe bursts, community unrest, electricity outages in the supply areas and bad weather conditions or rains causing problems with filtration and non-delivery of water to the city.

The loss of projected budgeted revenue not realised by the municipality in the 2017/18 financial year amounts to an adjusted R92,54 million. This does not include water lost as the result of local pipe bursts in the city or water theft on the way to the city.

According to the current draft budget tabled last Wednesday, “The cost pressures of the water and electricity bulk purchases continue to grow faster than the inflation rate. Given these tariffs are determined by external bodies, the impact they have on the municipality’s tariff is largely outside the control of the municipality.

“Furthermore, the adverse impact of the current economic climate, coupled with the unfavourable external pressures on services, make tariff increases higher than the CPI levels inevitable”.

The Polokwane Municipality is busy with a three-year programme to replace water and electricity meters with new smart meters with the goal of enforcing pre-paid electricity and water for all consumers in future, in mind.

Funding for municipalities, according to the draft budget, is obtained from various sources. The major sources being service charges such as electricity, water, sanitation, refuse collection, property rates, grants and subsidies from the national government.

According to the municipality’s draft budget, contributory factors for the increase in rates and service levels and service charges are the cost of bulk purchases, the cost of social packages to indigents, salary increases of municipal workers from 1 July 2018 and increased maintenance of network and infrastructure.

Revenue from water and electricity is budgeted to be a total of R1,34 billion and bulk purchases expenditure is budgeted at R915,497 million in the 2018/19 financial year.

One of the main challenges cited in the draft budget is the “economic slowdown and unemployment and its impacts on collection rates”.

The city’s debt, due to non-payment of water and electricity by some residents, amounted to more than a R1 billion at the end of January.

One of the aspects adding to higher tariff increases is the indigent subsidies, the municipal subsidy allowed which “exceeds the national norm and stretches the affordability threshold of the municipality”, as stated in the draft budget.

The proposed budget is to be discussed during a public participation process to take place in the next couple of weeks before the final budget is tabled before Council by the end of May. Residents are invited to attend these meetings to voice their concerns and input.

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  AUTHOR
Nelie Erasmus
JOURNALIST

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