After a citywide consultation with residents, the City of Johannesburg will be in a better position to decide on tariff rate increases. This is according to director of communications for the City’s customer revenue and relations Stan Maphologela. “When developing a tariffs proposal, the City of Johannesburg, is cognizant of the prevailing levels of unemployment, affordability, production costs, access to services, and economic competitiveness of the City.”
He explained that these are considerations which inform the City’s tariff setting criteria and link with reality on the environment it operates in. He highlighted that it should also be noted that some tariff increases are linked to the prices already determined by bulk suppliers, such as Rand Water and Eskom.
He said in setting tariffs, the City has to balance tensions around affordability, economic conditions, input costs while also ensuring that tariffs are cost-reflective, especially for trading services, such as water and sanitation, electricity and refuse removal. Tariffs for these services are informed by increases in bulk purchases rather than inflation. “The percentage increases of both Eskom and Rand Water bulk tariffs are above the South African Reserve Bank inflation target range. Given that these tariff increases are determined by external agencies, the impact they have on the municipality’s electricity and water tariffs is largely outside the control of the City,” explained Maphologela.
He carried on, “The City has not increased tariffs above the current inflation on the tariffs within its control, but rather marginal increases to cover the cost of delivering public services.
Proposed electricity tariff increase is about 12.19 per cent.
He also mentioned that the City has introduced a step tariff for electricity services, which implies that the more electricity consumers use, the more they will pay, with a view to reducing electricity consumption and benefiting lower consumption users. “It is to be noted that the overall weighted average increase from sales expected to be derived from the proposed tariff escalations is estimated to be 12,19 per cent which is just below the guideline (12,20 per cent) issued by NERSA,” added Maphologela.
The proposed water tariffs increase will be 15 per cent. According to Maphologela, the proposed increase is based on the 14.5 per cent proposed tariff by Rand Water. “There is continuing engagement by SALGA (on behalf of municipalities) and the Department of Water and Sanitation to finalise the funding of acid mine draining and its impact on the proposed tariffs,” mentioned Maphologela.
Proposed refuse tariffs will increase by eight per cent. He said the proposed increases will generate sufficient revenue to ensure Pikitup can sustain its current service levels and extend services to new areas and housing developments.
Proposed property rates will increase by six per cent.
