JOHANNESBURG - The Cape Town city council is raising municipal tariffs by up to 4.8 percent in the new financial year just embarked on, it said on Wednesdy, suggesting they could be the lowest increases for a metro in South Africa.
In a statement, the city's chief financial officer Kevin Jacoby said electricity charges would rise by 4.8 percent effective July 1, while water and sanitation would go up 4.5 percent, rates by would increase by four percent and charges for refuse removal would edge up 3.5 percent.
The city, like other municipalities, relies on income from rates and services to fund the delivery of water, sanitation, electricity, clinics, traffic lights and fire services.
Jacoby said the city would have preferred not to raise tariffs given the devastating impact of the Covid-19 on household finances.
"But as it is, the cost of providing services outpaces the income we get from rates and tariffs which is used to pay for the provision of services," he said, estimating the impact of the pandemic on the municipality so far at about R5.7 billion (US$332 million).
"The city has experienced increases in its input costs across the board, such as from (state utility) Eskom for the bulk electricity that the city on-sells to its customers. Some 65 percent of the income from the electricity tariff goes to buying electricity from Eskom."
He said the council had managed to keep increases conservative by cutting costs and expenditure where possible and changing programmes and plans.
The council had made R3.3 billion available for rates and services assistance in the new financial year, Jacoby added, urging those severely impacted financially by Covid-19 to contact it for information on available relief options.
The chief financial officer said the municipality had increased its capital budget for service delivery-related infrastructure to R9.6 billion ($559 million) in the new year to help boost Cape Town’s economy and local livelihoods.