Eskom’s new tariff to hit Joburg’s poorest

Johannesburg’s poorest residents are set to be the hardest hit by an increase in tariffs, which the city council has blamed squarely on power utility Eskom.

Member of the mayoral council for finance Funzela Ngobeni was critical of Eskom during his tabling of the city’s R64.5 billion budget for 2019/20 financial year. While the proposed tariffs for property rates, at 5.5%, and refuse removal at 7% remained unchanged from the budget proposal, the city said it had been forced to increase the electricity tariff over and above the proposed budget.

Ngobeni said: “Coupled with the recent award by [energy regulator] Nersa to Eskom of a tariff of 15.63% – and despite all attempts to absorb the costs of this increase – the city has had little option but to increase the electricity tariff from its originally proposed 12.20% average tariff to a proposed 13.07% across all categories of customers. “For the city, the new increases resulting from the Nersa decision represents a disappointing ruling which will only serve to add further hardship faced by residents and businesses alike.”

In March, Nersa granted the power utility an average price increase of 9.41%. He also announced that Joburg mayor Herman Mashaba planned to approach the South African Human Rights Commision to ask them to intervene on tariff increases which would exacerbate the lack of access to electricity for the poor.

“Given the poor state of the national economy and the massive corruption at Eskom itself the city, on behalf of our residents, had argued that the proposed tariff increases were simply unacceptable,” he said.

“Ultimately, those worst affected will be the poorest of the poor within our city facing increased barriers to accessing stable and safe electricity for their households.”

While access to electricity was not explicitly mentioned as a right in the constitution , Ngobeni said it formed a critical municipal service which local government was obliged to provide. Meanwhile, the residents of Alexandra, which flared up in violent protests last month and earlier this month over housing and other municipal services, have been promised a reprieve with R100 million allocated to the township in various development projects.

The city advanced a three-year capital budget of R3.5 billion and an operating budget of R1.1 billion for 2019-20 to the department of housing. Ngobeni noted the economic outlook had deteriorated during the 2018-19 financial year.

“Government is faced with increasing funding pressures from state-owned companies which require government financial support. “Mr speaker [councillor Vasco da Gama], the main risks to the economic outlook are continued policy uncertainty and a deterioration in the financing of stateowned entities.

“These factors, alongside continued high unemployment and slow growth, will continue to exert pressure on municipal revenue generation and collection levels, especially in respect of residents who face trying economic times.”

Info:

• Tariff increases
  13.07% for electricity across all categories of customers
  9.9% for water
  5.5% for property rates
  7% for refuse removal

– simnikiweh@citizen.co.za

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