Share this article

2008-03-26: Residents invited to have their say on city tariffs for water, electricity and waste rem

Residents and stakeholders of Johannesburg will have an opportunity to comment on a new system of tariffs for essential services such as water, electricity and refuse removal during a public participation process.

This will start from 28 March to 30 April 2008 to allow affected individuals and groups to submit comment on the draft budget and approved tariffs for the 2008/09 financial years. These documents are available at the City's People Centre's and the website.

Clr Parks Tau, the member of the Johannesburg Mayoral Committee for Finance and Economic Development says a new system to determine tariffs is essential to take into account recent trends and international best practice.

"As a city we have to set realistic tariffs for these services against the backdrop of an increased demand on limited and fast depleting resources," he says. Key factors to take into account are:

the current national electricity supply constraints;
a projected shortage of water resources by 2025;
rapidly depleting space for waste to landfill.
"The City believes that users of services must pay for their consumption. High consumers must pay higher tariffs than low consumption users. This approach will encourage both residential and commercial consumers to reassess their consumption patterns, introduce conservation measures and cut down on the wastage of scarce resources," says Clr Tau.

In its proposals to Council the Mayoral Committee describes tariffs as a long-term economic instrument to change consumption behaviour. There is an urgent need for consumers to reassess their consumption of scarce natural resources and to make a contribution to the global initiatives on climate change.
However the City has a responsibility to provide the indigent with free basic water and electricity at lower rates. The city proposes that the allocation of free basic water for registered indigents be increased from the current 6kl (6 000 litres) to 10kl (10 000 litres) per month and free basic electricity be doubled from 50kWh to 100kWh.

Among the other proposals from the city that will form the basis of the public participation are:

Johannesburg Water:

To promote a culture of water conservation a differentiated tariff should be introduced on the basis that high volume consumers would pay more than those who consume less. This will encourage high consumers to manage their consumption patterns.

Household consumers consuming below 15kl will not see an increase on their bills for the next financial year
Household consumers consuming above 15kl per month – to be increased by the Consumer Price Index excluding mortgage bonds (CPIX)
above 20kl per month – CPIX + 1%
above 30kl per month – CPIX + 2%
above 40kl per month – CPIX + 3%
Commercial and industrial users – CPIX + 2.
The current allocation of free basic water of 6kl per month should be increased to 10kl for all registered indigents and they should also be allocated an emergency water allowance of 4kl per year.  Residents who can afford to pay should no longer be allocated free basic water. These households should be charged at a unit price of R2, 50 for the first 6kl and according to the step tariff for subsequent consumption.

City Power:

Recent substantial increases in bulk purchase costs from Eskom and Kelvin Power station have resulted in an overall increase of 22,12% in input costs. The current national shortage in electricity has led to the system of load shedding. 

To counter this will require significant changes to consumption and a much stronger emphasis on energy conservation and demand side management.  The new tariffs should encourage this change in behaviour.

The following principles should serve as guidelines:

a decrease of free electricity benefit from households not on the indigent register. The consumption threshold will be decreased from 1 500kWh per month to 500kWh.
Increase tariffs in line with consumption to both domestic and large power users.
Increase the free basic electricity allocation to indigent households from 50kWh to 100kWh per month. 
A CPIX increase on consumption in excess of 100kWh but less than 300kWh.
A CPIX +1% increase on consumption in excess of 300kWh, but not exceeding 500kWh.
and increase of between 19% and 23% for large power users.
an overall 19% increase on current tariffs.
DSM tariff 23% increase to be effected on winter tariffs
The 2c per kWh "penalty tariff" announced by the Minister of Finance in his 2008 Budget has not yet been factored in as the City is awaiting guidelines for its implementation.

Pikitup – refuse collection

The current structure based on erf size should be changed to a tariff based on property values. The recent valuation process undertaken by the city in preparation for the new system of municipal rates and tariffs will be applicable.

The new tariffs will enable the city to continuously improve the quality of general services such as street sweeping, inner city clean-ups, action against illegal dumping and by-law enforcement. The introduction of a City Cleaning Levy to which both households and businesses will contribute will be charged as from next financial year.

The new tariffs for refuse collection will result in the following:

Improved service quality for domestic round collections – such as the timely completion of scheduled collections;
Improved cleanliness of public spaces and inner city areas;
Increased by-law enforcement and improved cooperation with stakeholders through the city improvement districts (CIDs);
the introduction of new and innovative technologies to support demand side management initiatives such as material recycling facilities;
Partnerships between the city, the private sector, communities and NGOs to implement demand side management such as waste separation at source and recycling initiatives.
Clr Tau says the growth of Johannesburg will be reflected in the coming 2008/09 Budget that is expected to show a 15% increase over the previous year's figures. More than 80% of the money will be allocated to the operating budget and the remainder will be invested in capital infrastructure.

The City has to allocate the money towards a number of competing priorities ranging from crime prevention and safety initiatives to housing and from urban regeneration to the delivery of basic services. The realities of budgetary constraints and finite resources require both the city management and individual consumers – domestic as well as commercial – to reassess their consumption patterns.

"The City is of the opinion that a new tariff structure will support consumers in their efforts to adjust their consumption and move towards a more responsible utilisation of resources," says Clr Tau.