City of Ekurhuleni consumers’ fears were realised when the metro announced a 13.87% electricity tariff hike while tabling the 2019/20 budget.

The huge electricity increase follows the announcement by the National Energy Regulator of SA that Eskom would be granted a 15.63% increase to charge to all municipalities.

The city has even set aside R48.9bn for the 2019/20 financial year. This is 11.4bn more than the previous financial year.

Tabling the budget and the integrated development plan at the council chambers in Germiston on Thursday, MMC for finance Doctor Xhakaza said the increase for capital budget is as a result of the city’s commitment to investing in capital and infrastructure projects.

“It remains critical for the city to invest in its infrastructure and productive sectors to progressively meet the needs of the communities and grow the economy.”

The tariff increase will kick in from July, when the next municipal financial year commences, Xhakaza said.

Other increases for services include:

  • 15% water tariff increase, which is in line with the standard stipulated by Rand Water;
  • Sanitation tariffs to increase by 11% to cover the costs of sewer purification; and
  • An increase of 5.2% for cemetery and crematoria services for residents, and 6.5% for non-residents.

The city’s R48.9bn budget is an increase of R4.5bn from the R44.4bn in the 2018/19 year.

Xhakaza said the R4bn safety net, which is an increase of R600 million from the current financial year, would cover the first 100kWh of electricity used; the first 9kl of water and sewer a month will be free; and free burial for poor families.

The MMC added that the city’s capital expenditure (CapEx) budget would grow from R6.5bn in 2018/19 to R7.4bn in 2019/20.

This CapEx would be funded with R884m (11%) from revenue generated internally; government grants would R2.8bn (38%) of the CapEx; while the City would fund the remaining 51% (or R3.74bn) through loans obtained from the capital budget.

Additional Reading?

Request Free Copy