POLOKWANE – All eyes will be on the Polokwane municipal council meeting this afternoon (Thursday) when the 2015/16 draft Integrated Development Plan (IDP) and budget will be considered.
Municipal spokesperson, Matshidiso Mothapo, said after the drafts had been adopted by council, the documents would be released for public input and refining of the documents before the final adoption of the budget by the end of May, as required by law, for implementation by July 1.
For consumers the proposed increase in water and electricity tariffs will be of special interest.
Last year the increases in water and electricity amounted to 7% each, but consumers can expect a higher increase this year, especially in electricity prices.
The tariffs for water and electricity are largely influenced and determined outside the control of the city by the National Energy Regulator of South Africa (Nersa), Eskom and the Lepelle Northern Water Board.
In a water and sanitation committee meeting before parliament on February 25, Lepelle Water CEO, Phineas Legodi, stated strategic challenges were around ageing infrastructure, deteriorating raw water quality, default on payment by consumers, and unauthorised or illegal connections.
The lack of effective cost recovery, water conservation and demand management, lack of maintenance and ageing internal reticulation infrastructure, were also cited as challenges.
These issues may influence the entity’s increase in water tariffs.
The proposed increases in bulk water tariffs by water boards were tabled before parliament on March 16, and have not been made public yet, although municipalities had to have access to the proposals to draft their budgets.
The announcement last week by Eskom that it would ask for another interim increase to help cover its expenses, can throw a spanner in the works of municipal budgets, which are reliant on the input received from Nersa in advance.
Nersa originally approved an annual average price increase of 8% last year and then an additional 4,69% in August, as allowed through the revenue clearing account (RCA) mechanism. This second increase was as a result of outstanding debts owed to Eskom by municipalities.
The increase then amounted to 12,69% for consumers this year, far exceeding the 8% annual tariff increase Nersa initially agreed to as part of the multi-year price determination up to March 2018.
Last Friday Eskom stated that electricity tariffs would increase by 12,69% for direct customers as from April and 14,25% for municipalities from July this year. It announced its application to raise electricity tariffs even further. Speculation currently abounds in the media that increases may be more than 25% as from July 1; double the increase expected this year.
Consumers will be paying 250% more for electricity than they did in 2008 if Eskom is granted the 25% increase requested, as widely reported in the media recently.
Consumers who receive electricity directly from Eskom, will have to pay the increased tariff as from April 1, and municipalities and municipal consumers’ increases will be effective from July 1, in line with the municipal financial year.
When probed for a glimpse of possible increases, the municipality’s spokespersons remained mum, saying all would be revealed this afternoon.
