Shock as electricity tariffs go up 27.7%

Hard-pressed South Africans will have to dig deeper into their pockets as a fresh wave of municipal services tariff hikes, set to further shrivel their salaries, take effect tomorrow.

Compared to residents of three other metros, City of Johannesburg ratepayers will be the hardest hit as their electricity rates will increase by 27.7% tomorrow.

In Cape Town, eThekwini and Nelson Mandela Bay, electricity tariffs have risen by 20%, 19.8%, and 22% for average-sized households.

Tariff increases for small, medium and large businesses range from 20% to 30% in the four metros.

Announcing the City of Joburg's R33-billion budget for 2011-2012 yesterday, executive mayor Parks Tau said: "The city annually reviews its tariffs in line with [its] tariff policy. The policy provides a broad framework within which [the] council can determine fair, transparent and affordable service charges that also promote the sustainability of service provision, taking into account the social, economic and financial imperatives of the city."

Johannesburg residents will also be hard hit by sharp increases in property rates, and water and sanitation, and refuse removal tariffs.

• Property rates increase by 6.7%;
• Water and sanitation tariffs rise by 14%; and
• Refuse removal tariffs go up by 6.7%.

Low-income earners, who are identified as Lifeline customers, will have to pay 8% more on their bills across the board.

Economist Mike Schussler described Johannesburg's electricity tariffs as very high.

"I know they get hammered by Eskom; but I'm still quite shocked. I thought it would be at around 22%," he said.

Schussler said, however, that Johannesburg's ratepayers received better services compared to other cities.

"We still get something, compared to other cities. I haven't been to all the other cities, but I believe we are better off. I have a lot of faith in Tau and believe he will do a good job."

The city's DA finance spokes-man, Patrick Atkinson, said: "The city can't afford the budget. In March the city was R600-million behind budget and our collection rate was 86%, well below the minimum of 94%."

Of the R33-billion, R29.4-billion will form part of the operational budget, while the remaining R3.7-billion will go to the council's capital budget.

The previous financial year's budget was around R28-billion. The city's finance chief, Geoffrey Makhubo, said the increase was inflationary.

Tau said the operational budget would focus on traffic management, fixing of potholes, reduction of power outages, repairing of street lights, cleaning of informal settlements and improving access to health services for the elderly.

The capital budget, he said, would focus on infrastructure projects, including the development of Alexandra Hostel and Baragwanath Central Precinct, installation of pre-paid electricity meters across the city, upgrading of sewer and water infrastructure and implementation of phase 1B of the Bus Rapid Transit system.

The city's most critical entities - City Power, Joburg Water and Pikitup - received the lion's share of the budget, a total of R17.5-billion.

The city is still trying to recover from a financial crisis that almost brought it to its knees in 2009 when it was forced to slash its budget by more than R1-billion to finance the completion of Soccer City ahead of the soccer World Cup.