THE City of uMhlahtuze’s ‘Policy for Engineering Service Contributions for Roads and Stormwater’, has been met with concerns from local business owners.
According to developers and business owners of new enterprises, they will have to pay for the use of arterial roads and infrastructure.
New developments according to the policy include the conversion of existing facilities, for instance when a residential home is used for home industry or education, because it is regarded as ‘enhanced land use rights’ or ‘exceeds the original consent use applications’.
Examples:
According to the policy, a small home school or pre-school, operating from an existing premises, must pay the municipality R200 000 upfront to make use of the existing road.
A facility with 50 children must pay R800 000.
The developer of a proposed mental health institute with 30 beds must pay R2.2-million.
The developer of low cost housing is expected to build its own infrastructure, pay the municipality R4.5 million, transfer ownership of the infrastructure to the municipality and give a 12 month guarantee on workmanship.
City Communications Manager, Mdu Ncalane said;
‘The municipality can do away with such contributions and, to compensate, simply increase all the tariffs and rates well above the majority of households’ affordability levels, consequently bringing the whole community to its knees.
‘Since the uMhlathuze Municipality was financially brought to its knees in 2008/9, it had to take some uncomfortable but objective decisions.
One was in ensuring that monies from land sales were no longer used to subsidise services, but instead strictly confined to capital reserves.
‘The municipality now has a total cash backed capital reserve of R160-million, whereas in 2008 it was zero,’ said Ncalane.
‘Although there were always engineering contributions for electricity, water and sewer in this Municipality, they were never controlled properly through correct service level agreements.
‘Therefore many developments went ahead without having contributed to the influence such developments imposed on existing and future infrastructure.
‘It is only more recently that the Roads Contribution was introduced for exactly the same reason,’ he said.
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