The 2012/2013 budget speech for the City of Tshwane (CoT), which was delivered today by Executive Mayor, Councillor Kgosientso Ramokgopa, proposed increased tariffs for the city’s 2012/13 medium-term revenue and expenditure framework (MTREF).

Ramokgopa says that service charges relating to electricity, water, sanitation and refuse removal constitutes the biggest component of the revenue basket for the CoT, ringing in at a total cost of R12.5 billion for the 2012/13 financial year and increasing to R15.7 billion by 2014/15. “This growth can mainly be attributed to the increase in the bulk prices of electricity and water, which have significantly increased from R2.7 billion in 2008/2009 to R9 billion in 2014/15,” he stated.

“Eskom’s drive to maintain security of supply over the next few years resulted in a Power Purchase Agreement with the city to the effect that electricity generated by the city’s power plants are sold to Eskom,” Ramokgopa explained. “R380 million has been provided against revenue and expenditure for this purpose. The contract will be re-negotiated for implementation in the new financial year and should additional revenue be generated; it will be included in the 2012/13 Adjustments Budget to be utilised for repairs and maintenance of the power stations, improving generation capacity.”

According to the budget speech, an additional R14 million was provided to the Housing and Human Settlements Department for the provision of water through water tankers (R8 million), the provision of chemical toilets (R1 million) and the marking and registration of shacks (R5 million).

The proposed tariff increases for the 2012/13 MTREF are more than the anticipated increases contained in the 2011/12 MTREF, totalling R278million, with the breakdown as follows:

• Electricity (1% above NERSA indication): R78 million
• Property rates (4%): R132 million
• Sanitation (4%): R20 million
• Waste removal (10%): R48 million
Total: R278 million

“The increase in the price of bulk water supplied to municipalities is 11.3%,” he further stated. “It is estimated that bulk water purchases from Rand Water for the 2012/13, 2013/14 and 2014/15 financial years, will amount to R1 143.5 million, R1 307.2 million and R1 477.1 million respectively.”

The 10% proposed increase in water tariffs, applicable to the residents of Tshwane from 1 July 2012 is expected to generate R200 million in additional revenue whilst the total revenue expected to be generated from sanitation services amounts to R555 million (2012/13 financial year).

by Candice Landie

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