Johannesburg residents should brace for a steep increase in the cost of both water and lights from July.
The city’s mayoral committee on finance, councillor Jolidee Matonga confirmed the increases in his budget speech on Tuesday (25 May).
“There were numerous factors that were considered in recommending the tariffs for the 2021/2022 financial year, including, but not limited to the market values of properties in the general valuation roll of 2018,” he said.
“Also included were the ratios as previously determined by Council, the economy of the country and the impact of the pandemic.”
Matonga said that the following increases are set to take effect for the 2021/2022 financial year:
- The electricity tariff will increase by 14.59%;
- The water tariff will increase by 6.8%;
- The sanitation tariff will increase by 6.8%
- The refuse tariff will increase by 4.3%.
With the tight economic climate that South Africa is facing, there is a marked decrease in national grant allocations to municipalities, which has forced the city to find alternative sources of funding, said Matonga.
The city’s funding model further relies on revenue generated from trading services as a source of revenue – followed by grants and loans, he said.
“What tends to differ is the share of each of the sources of funding. Furthermore, with new innovations and technological developments, the traditional notion of utilities as ultimate monopolies that can generate excessive revenue is eroding.
“For instance, large power users are moving away from the grid, and this means that revenue generated by City Power is at risk going forward.”
Matonga added that National Treasury has encouraged municipalities to keep increases in rates and tariffs at affordable levels for the budget to be realistic as required by the Municipal Finance Management Act (MFMA).
“With the scarcity of resources such as water, tariffs are increasingly used to encourage the economic use of scarce resources, and to price appropriately for returns to the capital employed in the provision of municipal services.
“In pursuit of financial sustainability, the City continues to monitor revenue trends, tariff structures, changes in the regulatory framework, and the economic impact on various consumer categories as part of formulating revenue forecasts.”