Nelson Mandela Bay seesaws on rates as council battles to pass 2025/26 budget
The Nelson Mandela Bay Council will, again, try to pass the budget on Wednesday and while smaller increases in tariffs for water and sanitation were promised by mayor Babalwa Lobishe last Thursday, it wasn't included in the draft budget. However, by 5pm on Tuesday, a circular indicating that there were conditions to the reduced water and sanitation rates arrived with councillors.
The Nelson Mandela Bay metro's council will again try on Wednesday to approve the budget for the 2025/26 financial year.
Last Thursday, during the council meeting, Mayor Babalwa Lobishe promised a 0.5% reduction in the proposed increases for water and sewage. But in the draft budget received by councillors on Tuesday, it looked like the increase was again set at 5.5% and not at the promised 5%.
But last Thursday night, a circular was signed by Nosipho Xhego, the executive director of corporate services in the metro, stating that the proposed reduced increase can only be put into operation if councillors agreed to scrap the city's scarce skills allowance and also agree to an overtime policy based on regulated thresholds.
The circular states that the municipality currently does not have an overtime policy, and also pays more than the regulated thresholds, and implementing these could save R22-million in the current financial year.
Other increases remain unchanged, including an increase in property rates by 5%.
The proposed increase in electricity prices stands at 12.8%, which is 0.6% higher than the Eskom price. The electricity department is running at a loss of more than a billion and is spending more money on buying electricity than what it makes selling it – because of theft and meter tampering. Allowing this increase, however, is not a decision that can be taken by council though, as it falls within the mandate of the National Energy Regulator. In 2022, the Nelson Mandela Bay Business Chamber successfully applied for an order from the Eastern Cape Division of the High Court in Gqeberha, indicating that Nersa must link price increases to a cost of supply and also was not allowed to pass on municipal inefficiencies to the consumer.
Werner Senekal from the Democratic Alliance, the official opposition in the metro, said the budget's projections were off and it was based on a 76% collection rate while the average collection rate is 72%.
He added that the Integrated Development Plan, setting out ward-based priorities and the budget, also was not in lockstep.
By law, the budget must be passed by 1 July, otherwise the metro's council can be dissolved.
In the latest circular sent on Tuesday afternoon, officials admitted that there must be better planning and also mechanisms in place to include ward councillors in decision-making around ward budgets. The money allocated to ward budgets in the revised budget, in comparison to last week, has increased by just over R44-million and, in comparison to the first draft budget in April, has increased by R452-million.
Ward 1 and 2 in the metro, both in need of critical electrical infrastructure work, both received R4.8-million and R2-million more in their capital budgets. Ward 16, which includes a large section of the metro's manufacturing industry, received a R14-million boost in the new budget.
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