The Nelson Mandela Bay municipality is mulling over the idea of scrapping reconnection fees for ratepayers who default on their municipal bills.
The municipality’s budget and treasury department has been tasked with investigating the possibility of scrapping the R345 fee and its financial implications for the municipality.
Mayor Mongameli Bobani said getting rid of the reconnection fees was a priority for the coalition government.
Residents who fail to pay for utilities have their electricity meters blocked and are forced to pay the reconnection fees.
The suggestion to do away with the reconnection fees was among several motions submitted by the EFF on Tuesday last week. Bobani said the reconnection fees would be a thing of the past as soon as the finance department concluded its investigation.
“The black caucus took a decision before coming into power that we are going to do away with the reconnection fees.
“We are in the process of ensuring our people are no longer paying for getting disconnected when they can’t afford services.
“Council, through that motion, has confirmed that and we are now in the implementation stage,” he said.
“Our people have been crying for quite some time that the reconnection fee is killing them, because you find a resident owes R50 and then they have to pay around R350 to be reconnected.
“This affects people of all races,” Bobani said.
But he said officials would ensure that residents paid for services and that the collection of rates was not affected.
But acting chief financial officer Jackson Ngcelwane has warned the move could put tremendous pressure on the city’s finances.
“If council does away with reconnection fees, council needs to know the financial implications.
“If you take away the reconnection fees you are saying that something must increase, you can’t leave a gap of expenditure and not replace it.”
Ngcelwane said one of the options to close the gap was to consider halving the staff at the city’s credit control unit.
“The reconnection fee funds something. People need to be reminded of the accounts and when they need to pay.”
Ngcelwane warned that doing away with reconnection fees could also affect future rates increases.
“The result could be increasing rates by about 11.5% or 13%, depending on what we want to add to the budget.”
In her motion of exigency, EFF councillor Phumza Tshanga said people were being disconnected unnecessarily.
“As the EFF we want to bring to the attention of the city the pain that is confronted by our people,” Tshanga wrote.
“The fact that people can’t afford to pay electricity until they are disconnected is proof that they cannot afford to pay for services,” Tshanga wrote.
The party also submitted a motion last week to scrap all historical debt, but this was rejected as it would plunge the city into a financial crisis.