logo
Ekurhuleni residents to pay more after tariff hikes

Ekurhuleni residents to pay more after tariff hikes

Eyewitness News30-05-2025

JOHANNESBURG - Ekurhuleni residents may have to pay more for municipal services following the city's decision to raise tariffs.
Finance MMC Jongizizwe Dlabathi announced increases in service charges during his budget speech on Thursday to come into effect in the 2025/2026 year.
ALSO READ:
- Ekurhuleni budget: Residents to pay more for water, electricity, sanitation & refuse removal
- City of Ekurhuleni decides to insource essential services to strengthen internal capacity
- Ekurhuleni sets aside R250m to rehabilitate road infrastructure, particularly potholes
However, unlike in Johannesburg, property rates and municipal bus services will not increase.
If the Ekurhuleni City Council approves the proposed budget, residents will see a 15% increase in their monthly water bills.
Electricity prices are also set to rise, but only in accordance with the guidelines set by the National Energy Regulator of South Africa (NERSA).
Additionally, refuse removal fees will go up by 6%, while sanitation services will cost 10% more.
Dlabathi said when compared to other metros, these increases are relatively reasonable.
"Our 2025/26 tariffs are lesser on sanitation and refuse removal compared to the City of Joburg, Cape Town and eThekwini, except for the City of Tshwane. Similarly, the average comparative analysis of 2024/25 tariffs shows that we came second with 10.43%, while the City of Cape Town approved the highest average tariff of 13.71%.'
These tariffs will go towards funding the city's R65 billion budget.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Nersa's municipal tariff process flawed, says Sapoa
Nersa's municipal tariff process flawed, says Sapoa

The Citizen

time5 days ago

  • The Citizen

Nersa's municipal tariff process flawed, says Sapoa

It is currently considering the applications of about 172 municipal distributors, and if approved, these will take effect on 1 July 2025. Most municipalities have applied for double-digit increases and in several cases up to three times SA's inflation rate. Picture: Moneyweb The process energy regulator Nersa is following to determine electricity tariffs for municipal supply areas is procedurally unfair, and meaningful public participation is impossible without access to crucial cost-of-supply (CoS) studies. This is the view expressed by the South African Property Owner's Association (Sapoa) in its submission to Nersa regarding the electricity tariff applications for 2025/26. Nersa is currently considering the applications of about 172 municipal distributors. If approved, these will take effect on 1 July 2025. On 12 June, at the third energy regulator meeting of its kind, it dealt with 45 applications. Municipal electricity tariff determination has been in turmoil for some time with several individual municipalities' tariffs having been reviewed in court and set aside. Read more 30% electricity tariff increase is a reality, says Erasa Last year, the High Court granted an application by AfriForum to review the methodology used by Nersa for more than a decade. It was found to be unlawful and set aside. Nersa however lodged an appeal which was heard, but the ruling is still pending. The City of Cape Town also challenged Nersa's determination of its tariffs for two consecutive years. That matter has also been argued in court with the outcome pending. Following the controversy, Nersa this year for the first time required municipalities to do a formal CoS study and use the results as the basis for its tariff application. ALSO READ: 30% electricity tariff increase is a reality, says Erasa In the past, the regulator simply published a guideline stating the recommended percentage increase and benchmarks for each category of customer – for example residential, commercial or industrial. Only municipalities applying for increases that would exceed the guideline, were subjected to public hearings. In a clear effort to comply with the law, Nersa this year for the first time published all the municipal tariff applications on its website and invited comments from the public. Most municipalities applied for double-digit increases, with many indicating that their CoS studies indicate under-recovery. Limpopo's Blouberg Local Municipality, for example, indicated that it needs an increase of 192% over the next three years to make ends meet. Its CoS study suggested an increase of 43% this year, with 20% and 13% increases in the following two years, respectively. Acknowledging that consumers will not be able to afford that, it tempered the proposed tariff increase for this year to 15.26%. Stellenbosch, asking for 9.95% more, said in its application its CoS requires a 'very high increase' and eThekwini, asking for an increase of 12.72%, says its CoS requires a 20% increase. ALSO READ: Eskom proposes further tariff restructuring to ensure 'transparency and fairness' Above inflation tariff requests Sapoa in its comments objected to the high increases, saying that the proposed municipal electricity tariff increases 'are significantly higher than the inflation rate, with some municipalities requesting increases nearly triple the annual inflation rate' (such as City of Johannesburg at 12.74%, against a 2024 average inflation rate of 4.4%). 'This is deemed unsustainable for commercial properties and their tenants.' Sapoa says its Operating Costs Report for January to June 2024 showed that variable recoveries (water, electricity, property rates) increased by 11.2% year-on-year, while basic rentals increased by only 1.6%. 'Electricity costs are the single biggest contributor to overall operating costs, accounting for 29%, and municipal charges [rates, electricity, water] comprise 59.2% of total operating costs,' it adds. It says operating costs are increasing faster than landlords' gross income, leading to less disposable income for property owners. 'Industrial properties are particularly hard hit, with operating costs increasing by 13.7% year-on-year.' The organisation points out that a substantial number of municipalities did not make their CoS studies available as part of their applications published on the Nersa website, even though Nersa must consider these studies when determining the tariffs. As an example, it names the Buffalo City metro (East London) and Cape Town. Sapoa cautions that commercial lease agreements typically pass utility costs, including electricity, to tenants. 'When occupancy costs exceed approximately 25% of a tenant's monthly turnover, particularly in retail, it can lead to financial hardship, lease non-renewals, or demands for lower rentals, ultimately affecting landlords' ability to keep buildings occupied,' it says. ALSO READ: Nersa slashes Eskom's tariff hike – but consumers could pay the price in taxes Financial mismanagement Sapoa highlights the damning findings of the Auditor General on financial mismanagement, huge water and electricity losses, and weak revenue collections in many municipalities. 'Metropolitan municipalities experienced an average of 18% electricity losses, estimated at R14.52 billion, largely due to inadequate infrastructure maintenance and illegal connections. Merely increasing tariffs without addressing these underlying problems will not resolve municipalities' funding issues,' the organisation says. In addition, Sapoa argues that the public participation process Nersa is following is procedurally unfair. 'Nersa published tariff applications for 172 municipalities within a short timeframe [less than six weeks]. The complexity and variation in tariff components across municipalities make detailed comments extremely difficult,' it says. By the deadline for comments, many municipalities' applications were still outstanding, according to Sapoa. The organisation suggests that Nersa does not grant any municipal tariff applications 'until a meaningful public participation process is completed, allowing sufficient time for detailed evaluation and public hearings'. Sapoa called for electricity tariff increases to be limited to 'no more than 5%', if public hearings are deemed unnecessary. It says this increase level 'is still well above the current and projected inflation rate'. This article was republished from Moneyweb. Read the original here.

Ekurhuleni residents to pay more after tariff hikes
Ekurhuleni residents to pay more after tariff hikes

Eyewitness News

time30-05-2025

  • Eyewitness News

Ekurhuleni residents to pay more after tariff hikes

JOHANNESBURG - Ekurhuleni residents may have to pay more for municipal services following the city's decision to raise tariffs. Finance MMC Jongizizwe Dlabathi announced increases in service charges during his budget speech on Thursday to come into effect in the 2025/2026 year. ALSO READ: - Ekurhuleni budget: Residents to pay more for water, electricity, sanitation & refuse removal - City of Ekurhuleni decides to insource essential services to strengthen internal capacity - Ekurhuleni sets aside R250m to rehabilitate road infrastructure, particularly potholes However, unlike in Johannesburg, property rates and municipal bus services will not increase. If the Ekurhuleni City Council approves the proposed budget, residents will see a 15% increase in their monthly water bills. Electricity prices are also set to rise, but only in accordance with the guidelines set by the National Energy Regulator of South Africa (NERSA). Additionally, refuse removal fees will go up by 6%, while sanitation services will cost 10% more. Dlabathi said when compared to other metros, these increases are relatively reasonable. "Our 2025/26 tariffs are lesser on sanitation and refuse removal compared to the City of Joburg, Cape Town and eThekwini, except for the City of Tshwane. Similarly, the average comparative analysis of 2024/25 tariffs shows that we came second with 10.43%, while the City of Cape Town approved the highest average tariff of 13.71%.' These tariffs will go towards funding the city's R65 billion budget.

Tough budget for Ekurhuleni
Tough budget for Ekurhuleni

The Citizen

time29-05-2025

  • The Citizen

Tough budget for Ekurhuleni

Ekurhuleni's total expenditure budget of R64.8 budget would be subjected to non-negotiable conditions Ekurhuleni MMC for Finance, Strategy and Corporate Planning, Jongizizwe Dlabathi, on Thursday tabled a R65.5 billion budget. According to Dlabathi, tough economic realities, lack of optimal collection, revenue leakages, weak liquidity position, ineffective expenditure management and the assumption that 90% of municipal revenue should be generated internally, were among key factors in the budget. Bullish about improving alignment and effectiveness of existing revenue collection systems, Dlabathi projected an additional estimated R2.1 billion gross revenue in the current financial year. 'Given that we intend not to borrow over the medium-term, all departments that are involved in the revenue generation value chain will have to pull together to ensure the achievement of our revenue goals in the medium and long-term. 'This will be spearheaded at the level of the Revenue Enhancement Committee that has since been put in place by Executive Mayor Nkosindiphile Xhakaza. 'The budget posture is guided by the directive to ensure a responsive city, working with agility to restore service delivery to communities. 'This directive demands that we focus on the core basics – providing quality, equitable and sustainable services to all in a manner that ensures the ideal quality of life,' said Dlabathi. Non-negotiables He said Ekurhuleni's total expenditure budget of R64.8 budget would be subjected to non-negotiable conditions, which would include: Spending within the allocated budget. Linking spending to the provision of essential services and goods. Fostering economic procurement and realisation of value for money. Strengthening internal capacity to reduce over-reliance on contracted services. ALSO READ: Joburg budget hanging by a thread: ANC fights to get their way as partners gun for them Key expenditure breakdown allocations include: Water and sanitation repairs will receive and maintenance R550 million,mainly to ensure resilient infrastructure that secures a sustainable supply of water and sanitation services—stretching to fixing water and sewer leakages. From the total of R20.7 million earmarked for human settlements, R7.5 million will be channelled towards basic repairs and maintenance work for selected hostels—with the rest covering the maintenance of rental units, including Ekurhuleni Housing Company. The Energy Department will receive R1.4 billion towards infrastructure and equipment maintenance related to substations, network enhancement, with R103 million allocated to the repairing of street and traffic lights, under the Operation Khanyisa Mhali. Additional R254 million has been allocated to the protection of energy infrastructure. Through the ' Siyakhuculula Manje and Clean Kasi ' programme, a total of R226 million has been allocated to environmental resources, waste management repairs, maintenance materials and supplies to support internal capacity to cut grass, maintain cemeteries, remove weeds, prune trees, and maintain landfill sites, wetlands, lakes, and dams. A total of R946 million has been allocated for roads and transport management, with road rehabilitation and pothole patching done under the auspices of the Hlasela Amapotholes project. A total of R41.3 million will be used for repairing and maintaining traffic signals. While more funds are still required, R54 million will go towards addressing sinkholes. Capital expenditure has been allocated R3.1 billion. An employee budget will be R13.4 billion – towards annual salary increments and the recruitment of additional workforce. Dlabathi said the budget will implement the recruitment of 700 permanent cleaners and 290 permanent EMPD (Ekurhuleni Municipal Police Department) officers to maintain strategic offices and buildings. 'A budget of R303 million will be allocated over the medium-term to equip the staff with essential tools of trade necessary to optimise performance. Time provision must prioritise departments that are providing essential services. 'The long-term trajectory is that of implementing the 70/30 ratio for service delivery, wherein 70% of the services are rendered in-house, with 30% contracted. 'As we implement the capital budget, we must not be found wanting with our supply chain management, planning, organising and as well as overseeing the completion of capital projects within time, scope and quality,' added Dlabathi. NOW READ: How Joburg plans to spend R89 billion

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store