Smaller electricity price hike proposed

THE Nelson Mandela Bay Municipality is proposing a reduced 7% electricity tariff hike from July, as opposed to the 9% previously on the table.

The city is also proposing increases of 9.5% for property rates and 9% for water, sanitation and refuse.

Businesses, however, are set to feel the pinch, with the city asking that commercial properties be charged a 10% higher rate for water than residential homes.

At present, businesses and households pay the same for water.

The city also wants to introduce a new sanitation availability charge to all property owners.

This will be fixed at 80% of the water availability charge.

The municipality’s chief financial officer, Trevor Harper, said the introduction of the sanitation availability charge could bring an additional R94.3-million into the city’s coffers.

This would be spent on the maintenance of sanitation infrastructure.

The 2016-17 draft budget and Integrated Development Plan (IDP) is subject to change as it still has to go to public participation before it is finally approved, presumably by May 31.

The metro’s political head of budget and treasury, Councillor Rory Riordan, said there would be a massive spend on water infrastructure in the upcoming financial year.

Of the R1.971-billion total capital budget, R942-million would be spent on the development of infrastructure. This represented 47.82% of the total capital budget.

The municipality is planning to raise R3.1-billion in loans for water, electricity and environmental management projects over the next five years.

Harper said it would take a loan of about R700-million in the 2016-17 year.

The loans were for revenue-generating projects such as smart water meters, which would save the city money in the long run.

“The loan will pay itself off, in a sense,” Harper said.

The loan repayments would be R40-million in the next financial year, R220-million in the 2017-18 year and R380-million in the 2018-19 year.

Last month, the city’s political leaders complained that the draft budget did not make provision for a metro police service, taking over rundown old age homes or the oceans economy – which have all since been accommodated in the draft budget.

The municipality will fork out R8-million a year over the next three years to assist old age homes with their operational requirements.

It has set aside R20-million, R24-million and R28-million over the next three years, respectively, for the operational costs of a metro police service.

Other additions are R18-million to be spent over the next three years on the development of cricket, rugby and soccer, and R3-million over three years for the economic development department to establish an economic forum.

The changes to the budget and IDP were welcomed by councillors at a joint mayoral and budget and treasury meeting yesterday, although the DA did raise some concerns.