Steep rates hikes proposed for cash-strapped KwaDukuza residents

Despite already facing economic pressures from all directions, KwaDukuza residents may soon be forced to deal with steep rates increases as well.

Per the municipal draft budget for the 2023/24 financial year delivered in council last week, ratepayers will see their property rates increased by 7%, refuse by 10% and electricity increased by 15%.

These all match or exceed the current national inflation rate which reached 7% in February this year.

The tariff hikes were largely denounced by opposition councillors who cited the already untenable cost of living situation.

“We reject all of the tariff increases. It is completely unaffordable for consumers who are already hamstrung by loadshedding and fuel hikes,” said Democratic Alliance caucus leader, Tammy Colley.

ActionSA caucus leader, Nel Sewraj, echoed the sentiment.

“We note that the annual budget presentation is a highlight on the municipal calendar, but for our residents it is a gloomy time. Basically, our residents have to pay for the municipality’s inability to curb electricity theft and manage revenue losses. It is becoming a burden,” he said.

Defending the increases, KwaDukuza municipality (KDM) mayor, Lindile Nhaca called the budget balanced, pro-poor and reflective of the national landscape.

“Over the last two to three years, our tariff increases have been linked to inflation. In fact, some of our tariff increases have not only been below the rate of inflation, but also lower than the cost escalations related to those services. This has resulted in revenue losses, as well as the inability of the municipality to recover its costs of rendering services. The municipality had to previously cut back on essential expenditures to balance the budget,” she said.

It is important to note that the budget presented in council was only a draft and that residents have the opportunity to submit comment until the end of April.

To have your say, visit the KDM Facebook page to see when the municipality will be visiting your ward.

For wards 6, 22 and 30 which covers most of Ballito, Salt Rock and Sheffield, the meeting will be held at 6pm on April 20 at Umhlali Prep.

Elsewhere, KDM forecasts growth in revenue to reach a total R2.47-billion.

Expenditure is also expected to grow to R2.47-billion (R130 000 less than revenue), while the capital budget will be R298.3-million.

The capital amount does not include a grant of R1.2-billion which was not factored into budget steering committee processes.

To improve on revenue loss rates, KDM has implemented a number of cost-containment programmes.

Chief among them are supposed plans to improve bad debt recovery processes and cut down on energy losses.

This includes the creation of a revenue and debt steering committee, while KDM continues its meter audit which aims to provide an accurate count of household electricity use until 2024/25.

An unclear ‘energy loss recovery strategy’ has also been proposed.

Given electricity is the single biggest revenue stream and expense for the municipality, it is crucial that ballooning losses are better managed.

At the mid-year mark (end of December 2022), KDM had already recorded losses of R148-million, or 26% of all electricity purchased by the municipality.

The draft budget will be reviewed following the public participation at the end of the month, before passing through council at the end of May in time for the start of the next financial year in July.

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