Thu. Oct 17th, 2019

Nelson Mandela Bay metro in for shocking electricity and rates hike

Mogameli Bobani NMB MayorThe proposed budget is meant to come into effect on 1 July.

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Residents of Nelson Mandela Bay, in Port Elizabeth, are in for a penny-cruncher as the metro, led by Mongameli Bobani, is set for an increase in electricity and property rates from 1 July.

Nelson Mandela Bay, prepare for these tariff increases

As reported by The Herald, the metro is holding a councillors’ meeting on Thursday, to determine whether the following proposed increases are viable:

Related: Eskom: Major municipalities set for 15% hike in electricity tariffs

  • property rates to rise to 7.7%
  • electricity prices to go up by 13%
  • water, sanitation and refuse to remain at 7.5%

According to the metro, these rate hikes are the revised version of the draft budget and integrated development plan (IDP) that was published for public consultation in April.

Except, in that draft budget, these were the proposed rate hikes:

  • property rates: 5%
  • electricity prices: 6.87%
  • water, sanitation and refuse: 7.5%

In essence, residents of Nelson Mandela Bay have not been allowed the right to comment on the revised increases, and according to the metro’s budget and treasury head, Mkhuseli Mtsila, nowhere in the prescripts of the law does it state that this should have been done.

“It will depend on what the law says — I don’t think we have to take a tariff increase for public participation,” he said.

Related: Nelson Mandela Bay metro accepts fault after baby drowns in ditch

Why has Nelson Mandela Bay proposed these tariff hikes?

Property rates

To supplement the large number of insourced security guards and call centre staff the City has hired in the last two years, Mtsila noted that they had no choice but to enact a hike in property tariffs.

In February, the insourced workers took to the streets to protest against the temporary status of their jobs.

Mtsila revealed that the need to implement this increase strategy came from the pressured decision council made in employing the disgruntled workers on a permanent basis.

“The council decided to take them [security and call centre staff] on, so we have to find money to fund this. At the end of the day, the budget reflects what we are trying to achieve as far as the municipality’s expenditure is concerned,” he added.

Electricity tariff hike

6.87 to 13% for electricity increases is a huge jump. Especially considering the fact that it was determined that inflation slowed to 4.4% in April.

However, for the metro, Nersa’s decision to hike up Eskom’s bulk electricity purchase by 15.67% meant that they too had to revise the hike proposal of 6.87% that was submitted in the draft budget.

For Bobani, the proposed increase may seem a bit too much, but in comparison to other metros, this is a fair adjustment.

“Our tariffs are determined by the rate of inflation. We are below two digits, and the only one with two digits is electricity because it depends on Nersa.

“At least we did not go up to 20%, we have managed to keep it low because we did not want to squeeze residents,” he said.

Related: ANC slams Mashaba over promise to rebuild demolished Alex homes

ANC is ‘concerned’ about proposed hikes

The issue will be debated in the councillors meeting on Thursday, with the municipality holding the edge over those who are against the budget proposal.

However, the ANC chimed in on the subject, stating that it is concerned with the ramifications of squeezing the City too tightly with these large increases.

“We are concerned, it’s going up too much, it’s unaffordable and it’s a terrible situation to find ourselves in.” — Rory Riordan, ANC councillor.

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