TZANEEN: Pay more, but not too much

The Greater Tzaneen Municipality Mayor Maripe Mangena, announced during the State of the Municipality address that electricity will go up by 6,84 %, water will increase by 5,3%, sanitation by 5,3% whilst solid waste will also be increased by 5,3%.

Mangena said the increase of electricity tariff by 6,84% will be sufficient to provide the electricity service but it is challenged by the ongoing high increases in electricity bulk purchases that resulted in decrease in demand as some consumers have moved to alternative sources of energy and/or invested in energy saving equipment.

“The Municipality has therefore taken all the cost drivers associated with rendering the electricity service, including the statistical data and distribution losses in consideration with the calculation of the electricity tariffs,” said Mangena. In calculating the water tariffs the following were taken into account: Affordability of the tariff increases; Breakeven point of the services; Essential Operational Requirements; Equitable share allocation from Mopani District Municipality and the fact that the Municipality purchases untreated water and performs its own purification enables the Municipality to approve affordable tariff. With regard to sanitation there is however a concern regarding the ageing infrastructure and the impact that it may have on future operational budgets. “The tariff increase of 5,3% is necessary to address essential operational requirements,” he said.

He further said that solid waste tariff increase of 5,3% for the 2018/2019 financial year is necessary to recover the cost of services provided to consumers which include refuse collection cost, disposal cost, weighbridge cost and other ad hoc services. Mangena said all tariff increases are within the guidelines set by National Treasury which confirms that Greater Tzaneen Municipality does not prejudice National Economic Policy on Inflation.

“National Treasury continues to encourage municipalities to keep increases in rates, tariffs and other charges at levels that reflect an appropriate balance between the interests of poor households, other customers and ensuring the financial sustainability of the municipality.

For this reason municipalities must justify in their budget documentation all increases in excess of the 5.3 % upper boundary of the South African Reserve Bank’s inflation target,” he said.

He added that property rates is a major source of revenue for the Municipality and contribute to cover cost of the provision of general services.

“Determining the effective property rate tariff is therefore an integral part of the municipality’s budgeting process.”