Residents in Cape Town are preparing to march against a proposed 26.9% water and sanitation tariff hike in the City of Cape Town’s budget, while officials say they are grappling to plug holes in the city finances.
Capetonians distrustful of the City government are accusing it of profiting from the drought, but city officials insist that the increased cost for water is necessary because water consumption has declined since the drought threatened water provision in Cape Town.
“Due to the current drought and the associated restrictions we’ve seen a substantial drop in water sales. The average city consumption is down year-on-year from 900-million litres per day in February 2017 to just over 500 million litres per day, leading to a shortfall in revenue of nearly R2-billion,” Xanthea Limberg, mayoral committee member for water and sanitation, told the Mail & Guardian.
The tariff hike, if implemented, will be charged from July 1.
Water and sanitation tariffs are meant to fund service delivery in the City. While residents are using around 516-million litres of water a day, the national water and sanitation department has told the City to reduce water consumption to 450-million litres per day, Limberg said. This means that the City expects water sales to continue to drop and current tariff costs don’t match the cost the City incurs to supply water.
“The cost of operations of water supply has also increased more than the tariff has over the past number of years,” Limberg said.
In March, Cape Town Mayor Patricia de Lille announced that there would be a proposed 26.9% water tariff hike when she presented the City’s proposed budget.
The tariff hike would come at a time when the City has just introduced fixed costs for water users, that are implemented based on the size of the water meter on their property. Most residents will be charged R56 to R100 per month.
But Save Cape Town, a group that plans to march against the tariff hike on Friday, says the City has yet to explain how the money from the tariff will be spent.
“We want to know what happens to the money that the City gets for water-related projects. We will put the City in its place,” Anne Smith, a member of Save Cape Town, told IOL.
Limberg has said, however, that the City does not make a profit from tariffs.
“All income will be used for the provision of water and sanitation services in either maintenance or investment in new infrastructure. This is what tariffs are used for. The City does not make a profit on tariffs. It is ring-fenced for water services provision,” Limberg emphasised.
According to Limberg, the money from the tariff hike will be spent on drought projects and finding alternative water sources – such as groundwater and funding aquifers.
In the latest City budget, the highest allocation has been earmarked for water services, which is set to receive R5-billion of the budget. More than R1.4-billion is set to be spent on drought-related projects, such as aquifers and developing treatment plants to recycle more water.
Just two days ago, residents in Elsies River, a community in the Cape’s northern suburbs, held a meeting to encourage people to participate in submitting public comment on the proposed budget. The meeting was held in a church, that became filled with concerned residents.
“It’s daylight robbery, the poor will be the most affected. We are unhappy … even VAT has increased while we earn peanuts. Residents … need to know they have the right to challenge the proposal,” said Charmen Gribi, a resident.
The Cape Chamber of Commerce and Industry has also weighed in on the budget, saying the City governance costs are too high and that the tariff hikes would encourage businesses to find their own sources of water.
“We already know that many businesses are finding it cheaper to generate their own electricity with solar panels than buy it from the municipality and the same thing is happening with water.Some businesses will go off the water grid and the City will lose income,” Cape Chamber of Commerce and Industry president Janine Myburgh told the Weekend Argus.
The public has until May 4 to comment on the budget.