A 55.16% increase in water tariffs for the City of Cape Town had residents in an uproar. After consideration and assessment of the City’s draft budget for 2018/19 – the tariff has been reduced to 10.10%.
The overall increase in the Department’s budget requirement has also been reduced from 26.96% to 19.9%. This has been achieved primarily by the rephasing of the New Water Program, including the savings which will result in the current financial year.
“After careful and intense consideration of a record 40 000 comments which were received on the proposals in the City of Cape Town’s tabled budget, as well as various portfolio committee meetings, workshops and discussions, the reduced revenue requirement has resulted in substantial changes to the proposed water and sanitation tariff increases to be proposed for Council’s approval of the final Budget on 30 May 2018,” City of Cape Town Deputy Mayor, Ian Neilson, said.
Among others, certain proposed domestic, non-indigent water tariff increases have been reduced:
– Step 1 (less than 6 kl water usage per month): from 55,16% down to 10,10%
– Step 2 (more than 6 kl but less than 10,5 kl water usage per month): from 6,26% down to 0%
Among others, certain proposed domestic non-indigent sanitation tariff increases have been reduced:
– Step 1 (less than 4,2 kl per month): from 78,71% down to 9,87%
– Step 2 (between 4,2 kl and 7,35 kl per month): from 23,74% down to 0%
The property rates increase is also proposed to be lowered from 7,2% to 6,5%.
Neilson has said that the City has seen where it could shift funds and continue to cut funds. “For instance, we have reviewed our loan amounts which will reduce the external interest costs in the tabled budget by just over R300 million per annum over the next three years,” he said.
The capital requirement for the New Water Program has also been amended. The amended New Water Programme is now proposed to comprise R14,1-billion over the next five years instead of the previously proposed R19-billion.
|Operating Rbn||Amended Operating Rbn||Capital Rbn||Amended Capital Rbn|
Residents should note that more changes have been made to the proposed fixed delivery charge for water.
According to the City, this fixed delivery charge is necessary to counter the variations in water usage, and will bring certainty to the water and sanitation tariff. “Whether one uses more or less water, for instance, it still costs the same to operate the distribution system and the City needs to cover its costs,” Neilson said.
He adds that no profit is made from water income – all income generated is used for the investment and maintenance of water infrastructure.