Steep rise in electricity tariffs

GRAAFF-REINET NEWS - Graaff-Reinet residents are in for a nasty shock with the approved new budget (2021/2022) which will see an electricity tariff increase of 16% on the cards.

This steep increase is subject to approval by NERSA and this percentage may vary as the approved guideline increase was "fixed" on 14,59%.

The Dr Beyers Naude Municipal Council has approved its Integrated Development Plan (IDP) on 27 May 2021 and its annual operational and capital budget on 21 June 2021.

"The tabling of the budget for the new financial year comes at a time when the country - and in particular our municipality - once again finds itself in troubled waters," said Municipal Manager Dr EM Rankwana. "The devastating effect of the Covid-19 pandemic, now going into the third wave, will call for tough choices. To add salt to injury we are still battling the effects of the prolonged drought.

"These natural disasters have to potential to cripple our financial position and compromise the municipality's ability to deliver services to our community."

The sharp rise in the electricity tariff is the direct result of Eskom's 17,8% increase to the municipality's bulk purchases, said Dr Rankwana.

"With an increase of 16%, we have no other option than to lower the increases for our other services to ensure that the overall municipal tariff increases remain affordable for residents.

"This simply means that much-needed cost-reflective tariff increases for other services can't be undertaken."

The total budget amount for the 2021/2022 financial year amounts to more than R610-million. The total operating revenue has decreased by 8,5% - or R57-million, for the 2021/22 financial year, compared to the 2020/21 adjustments budget.

Total operating expenses for the 2021/22 financial year amounts to R484-million, resulting in a budgeted surplus of R99,7-million. Compared to the 2020/21 Adjustments Budget, operational expenditure decreased by 5,1% in the 2021/22 budget.

Dr Rankwana says the municipality is currently struggling financially and cost containment measures are being implemented such as a monthly curb on overtime, acting allowances and travel expenses.

It also includes the stopping of non-essential procurement.

The major operating expenditure items for 2021/22 are employee-related costs (35%), bulk electricity purchases (24%), depreciation (10%), repairs and maintenance (6%) and other expenditure (25%).

Funding for 2021/22 Operating Budget is funded from various sources, the major sources being service charges such as electricity, water, sanitation and refuse collection (44%), property rates (8%), other revenue (18%), grants and subsidies received from National and Provincial Governments (30%).

On the positive side, an amount of R61,1-million was allocated for major infrastructure projects.

The Collie Koeberg Sport Stadium will be upgraded to the tune of nearly R9-million while R9,655-million has been set aside for the upgrading and refurbishment of sewer pump stations.

The upgrading of the Steytlerville solid waste disposal site received a budget of R4 million and the replacement of steel pipelines from Wanhoop will receive R4,5-million from the budget.