Cape Town's ambitious infrastructure budget is a bold move towards sustainable urban growth and safety

Daily Maverick

29-04-2025

Given the state of local government, it might seem unusual for any metropole, in a single year, to table a South African record infrastructure budget, major expansions to policing and cleaning operations, electricity price relief, and the most inclusive indigent and pensioner support package, all while still maintaining the lowest monthly bills for ratepayers compared with all other cities.
Making all of those sums balance is no mean feat. Because of how cross-subsidisation works, this has meant some larger than usual proposed increases for more valuable properties. This has understandably generated much discussion and objection, particularly among residents owning higher value properties, and notwithstanding the extensive electricity price relief we're offering with just a 2% increase vs 11.32% nationally.
While much of the discussion and criticism is reasonable and reasoned, there is also much that can be misconstrued in such a complex budget. Here I hope to address some of the common issues I've seen raised.
First, I will cover what the budget is intended primarily to fund: (1) infrastructure investment; (2) large additional safety investments; and (3) additional city cleaning capacity, particularly along main arterial roads, in informal settlements and in communities with a large number of 'backyarder' residents. And why this still represents excellent value for money.
Then I will cover what options we are considering to soften the impact of these increases, particularly for pensioners and for property owners in the R4-million to R7-million value bracket, where much of the public objections have come from.
While we have deliberately designed this budget to protect families in the R1-million to R2.5-million property value bracket, we recognise that it is also true that those living in more valuable properties are not necessarily well off.
Finally, I will cover the so-called 'utility reform programme' run by the National Treasury and its implications for metro budgets.
Given the number of issues to canvass, this is a lengthy piece. I hope you'll stick with me as we discuss honestly our approach, and our recognition of the concerns raised.
What this budget does:
1 Much higher levels of infrastructure investment
Much bad policy results from politicians' fear of having truthful conversations with voters about the real constraints or what is really needed. So it is that our country now drifts like a boat without an engine, with no growth and no real prospect of growth.
It's always easier to put off difficult things, to go along to get along. We can go on like that year after year. It will feel easier, but it's exactly the approach that has got us where we are, and it will only get worse.
That is the principal reason all of South Africa's other cities, bar Cape Town, are in advanced collapse — because year after year it's been easier to hope someone else will course correct.
You can get away with that for a time, because things seldom collapse overnight. Until they do. Roads explode. Entire city water networks shut down. And by that stage, it is far too late to start to fix things, because infrastructure projects take years to plan and execute.
In contrast to this, Cape Town is pursuing a simple and powerful idea: we refuse to allow the same decline and collapse now ubiquitous across South Africa's towns and cities to happen here. That sounds like a heartwarming statement, and the risk is that's all it will be, unless it's matched with the firm commitment and strength of will to actually make it so. And the courage to be honest with the public about the choices.
While Cape Town was actually investing in infrastructure over the past decade or two, the truth is that we simply were not doing so at the necessary scale and pace to keep up with the pressure. We can all see this.
Water grid creaking
Our water grid is creaking — of course still far from the widespread collapse of the water system we see in Joburg, but also far from what we need and expect. Our sewer system is creaking, with every treatment works in the City at or above capacity (with the exception of the two now being upgraded as part of this infrastructure acceleration).
Fixing these things is not optional if we care about living in a functional, successful city. And as mayor I cannot in good conscience preside over a city that allows slipping standards or which knowingly underinvests. To do so would be dereliction.
So we must make sure our treatment works can discharge effluent of safe quality into our rivers and oceans. We must make sure we have enough sewage treatment capacity to cater for the growth the city is experiencing.
We must have sufficient fresh drinking water, of the highest and most trusted quality. We must have thousands of kilometres of new pipes in old neighbourhoods so that bursts don't become ever more common. We must have thousands of kilometres of new pipes in townships and poorer neighbourhoods so that people have better access to water and dignified sanitation.
We must build new roads and new MyCiti routes to ease congestion and get people moving more freely around the city. Again, a choice to forego these things is to actively choose decay.
The investments we are making (and funding) in Cape Town will guarantee that our city is able to cope with the incredible growth it is experiencing, deliver reliable infrastructure, and improve the quality of life for the poorest residents.
That's why we're pushing so hard on infrastructure budgets, and why we must keep going. We are investing R40-billion over the next three years – more than all three Gauteng metros combined. It isn't enough, but it is a very strong start.
Consider just some of the specific projects this infrastructure budget actually funds: two major wastewater treatment works upgrades, a water re-use project to secure Cape Town's water supply for decades, hundreds of kilometres of new or upgraded sewer pipes, 75km of replaced water pipes to bring down bursts, major public transport projects to ease congestion, road upgrades, electricity grid upgrades, and much more besides.
Is there any person who surveys all that is happening in other South African cities and honestly argues that these investments are not necessary and urgent?
When we do these things, we can be quite assured that Cape Town will continue to succeed, and will be well prepared for the years ahead, no matter what happens in the rest of South Africa. That is peace of mind worth paying for!
2 This budget funds two huge new safety investments
For the first time we will be deploying dedicated law enforcement officers for every ward distributed equally in the city. More than 500 new officers are being funded for this purpose. This will not in any way detract from the dedicated deployment of nearly 1,000 officers that the City and provincial government jointly fund in gang and violence hotspots. This is a new, additional service that we are investing in and fully funding.
For the first time each ward in the city will have five dedicated officers who will know the community, who residents will get to know over time, and who will be able to do dedicated local policing, crime prevention and by-law enforcement.
While crime prevention is not strictly the mandate of the City (and we certainly won't let up on holding the national government accountable for its failures here), the fact is that personal safety is overwhelmingly the number one concern of every South African family, and we must do all we can, where we are, with what we have.
Then, this budget will also be funding a new dedicated deployment of more than 220 additional officers to protect City frontline service staff, provide armed escorts to our service vehicles, and protect our construction sites. At over R100-million, this is a cost that galls, but which is now unavoidable.
The proliferation of 'extortion mafia' is now so severe in poorer communities and townships that it's getting difficult to deliver even basic services there without our staff coming under attack from violent extortionists demanding payment. So, too, with our construction sites and facilities.
3 This budget funds two significant new investments in city cleaning
I've written and spoken extensively on our dedication to seeing a much cleaner Cape Town. We've launched our new anti-litter campaign called 'Bin it in the Bingo Bin' led by Bingo our green bin mascot; we run a daily education and behaviour-change programme in local schools; and we've stepped up much harsher penalties for litter bugs and dumpers, and bigger rewards for those who report them.
But with all of this, I am still far from satisfied, and I think most people share this dissatisfaction with the cleanliness of the city. There has been improvement, but there is still far too much litter and rubbish around. This is particularly so in informal settlements and in communities where density — because of high numbers of backyard structures — has far outstripped our current capacity to clean up.
This budget proposes to invest additional funds in things we will all benefit from: more regular cleaning of water courses, cleaner beaches, and cleaner streets. It also funds a large new dedicated team to clean all of Cape Town's major main arterial routes and highways every single day. Every resident will see and feel the visible benefit this additional cleaning brings.
And it proposes to fund significant additional cleaning capacity in informal settlements and areas with high numbers of backyarders. While this benefit may not be direct to you if you don't live in a township, I strongly believe most of us not only support poorer residents living in conditions of greater dignity, but understand the mutual benefit of this to our whole society.
That summarises the strategic choices behind this budget and why the tariffs and charges have been proposed to fund that strategy.
I am confident most Capetonians firmly support this strategy and understand both its obvious logical necessity and its obvious personal benefit to them and their families.
Moral imperative
They understand that we must improve living conditions for the poor, both as a moral imperative, and because it benefits everyone in South Africa to have more people living with more dignity.
They understand that as the national state vacates and retreats from its responsibilities to maintain law and order, we must step up and step in to make our city safer for all.
And they understand that we cannot have infrastructure degradation and slow malaise. We must invest so our services are maintained at a high standard and to guarantee the present and future success of our city.
Value for money
This strategy — all of this — is still delivered with incredible value for money.
We have published the comparative tariffs for every major city in the country showing Cape Town has the lowest total bills of all major cities, for all common household consumption scenarios.
In other cities, municipal charges go into an abyss of dysfunctionality and decay, with no clear return or value for these payments at all. While in Cape Town, the City offers all of this service improvement, functionality and investment, while still offering comparatively lower municipal bills than other cities. That is a fact, not an opinion.
This remains true even when adjusting for Cape Town's higher average property values by 25%. Cape Town's municipal bills for a R5-million property are still lower than a R4-million home in Joburg, in most consumption scenarios.
Crucially, the price difference is largest for middle class properties worth R2.5-million and below, who are paying hundreds of rands less every month compared with families living in properties of lower value in Joburg.
Cape Town residents also benefit from the property value appreciation that occurs (almost uniquely now) in our city. For the majority of working people, our homes and pension funds are likely to be the two biggest assets we will own in our lives. When the value of our homes appreciates, while bond values go down over time, then our total overall family wealth increases too. This is undeniably a good and positive thing for social mobility and for the prospects of leaving something of value for our children one day.
Property values in other cities are sadly declining, decimating the net asset value of middle-class families. This is tragic. We must never wish that on our city.
Our budget is designed specifically to protect families in lower value properties in the value bracket below R2.5-million. We can see that this indeed has an effect, as most of the public concern and objections have come from residents living in homes in the R4-million to R7-million value bracket.
While Cape Town has more than one million rateable properties, this R4-million to R7-million bracket represents a relatively small proportion of properties — roughly 40,000 homes. However, through cross-subsidisation, this bracket does carry a considerable share of the cost of subsidised services for poorer residents.
Our City uses a strong cross-subsidisation model — designed deliberately to protect poorer families. This is quite right in our context of widespread poverty, and we are very proud that this city delivers more for the poor than any other in the country (precisely contrary to the oft-repeated propaganda about Cape Town).
However, we must also ensure that this cross-subsidisation model is sustainable, and that we do not overburden those who can pay in supporting those who cannot.
Concerns
So I do understand the concerns honestly and volubly raised, as not everyone living in a home in this bracket is cash flush. Often the value of their homes has risen faster than their incomes. This is particularly true for pensioners.
To shield these residents from the impact of these tariff increases, we are proposing several interventions that will offer meaningful help.
First, we will soften the extent of cross-subsidisation in the citywide cleaning tariff, so that a smaller proportion of the overall tariff is carried by this category of homes. This lowers the impact of the tariff significantly, and should see proposed bills come down by several hundred rand a month.
Second, we will extend the blanket R450,000 rates rebate that currently applies to all properties under R5-million in value, to all properties up to R7-million in value. This will lower the rates increase for those properties by roughly R250 per month, and lower the overall increase for these properties markedly. This will mean lower revenue of roughly R65-million, and will be trimmed from all of the services I have discussed above.
Second, we are modelling a significant increase to the income threshold for pensioner rebates, from R22,000 monthly income to R27,000 monthly income. This means all residents over the age of 60 years and earning below the R27,000 monthly threshold would qualify for significant rates and service charge discounts.
All of these interventions, directly in response to the feedback received in the public participation on the budget, will meaningfully lower the impact of the tariff proposals this year.
The 'utility reform programme'
I now turn to the National Treasury's so-called 'utility reform programme' and its impact on City budgets.
The National Treasury is rightly very concerned about the financial and operational state of municipal utilities — water, sanitation, electricity, and waste — across South Africa. Most of them are in deep financial trouble, spending hardly anything on maintenance or new investment, and unable to raise any new finance to fund needed investment.
The reform programme they have initiated requires municipal utilities to be financially 'ringfenced' — in other words, these utilities should not subsidise other services, or be subsidised by other services or by rates. They must be able to stand on their own feet financially, and be able to raise additional finance on the back of their own balance sheets to fund much-needed investment.
In Cape Town our utilities, with the exception of our waste management utility, have been largely financially self-funded for some time. However, in waste management there has been a significant subsidy from the rates base to cover the costs of citywide cleaning services. These are costs over and above the costs of wheelie bin collection, which are already billed separately on municipal accounts.
This reform programme is right in principle and much needed across the country. We support it wholeheartedly.
It does, however, mean that we must transition to a fully self-funded waste and cleaning service that does not rely on the rates base for subsidy. Residents have always paid these costs — they have just been opaque or implicit, because they've been included in the rates account and in the price of electricity. Now they are being removed and listed clearly and explicitly on municipal bills.
This is not new revenue for the City, or a new charge for residents. It is only making explicit that which is implicit. The only additional, new expenditure being funded through this tariff is the additional cleaning capacity I discussed earlier.
Enormous sweetener
The National Treasury has offered an enormous sweetener in the form of billions of rand in performance-based grants to those cities that get this reform project right.
We are eager to do so, because it is right in principle, and because we would love to benefit from potentially billions in grants. This would all be invested back into more infrastructure, lowering the City's borrowing needs and consequently lowering costs for residents.
So it's important that we get this right. At the moment Cape Town is the only one making a serious effort, and so stands to benefit either the most or first from this incentive pot (the details on how this incentive grant will be paid aren't yet finalised).
It is true that the National Treasury has not immediately focused its eye (or its ire) on waste management — its initial focus is on the desperately underperforming water utilities around the country.
And it's true that it has allowed for staggered implementation over the next three years.
But our approach has been that it is much less confusing for residents to make the transition in one go. The alternative would be to have three years where the city-wide cleaning costs would be borne partially by the tariff, and partially by electricity tariffs, adding more confusion for residents. By definition, the cleaning tariff would also have to go up significantly each year for three years to reach its 'final' level in time.
Choices
I've set out here honestly the choices we've made and why we've made them.
I hope that residents take heart in the firm surety of our one overriding commitment: that Cape Town will not accept that decline and failure in South Africa will define our future here. We will do what is necessary now to prevent that outcome, and guarantee our success for our city and all who live here.
We will do so with respect for public money, delivering all of these services and investment at the lowest cost of all South Africa's metros, and at the highest standard.