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IOL News
24-05-2025
- Business
- IOL News
How Durban's R70. 9 billion budget aims to transform infrastructure and manage tariff adjustments
The eThekwini Municipality's R70.9 billion proposed 2025 and 2026 Medium Term Revenue and Expenditure Framework (MTREF) budget is being scrutinised by ratepayer associations. The eThekwini Ratepayers Protest Movement said they still object to the proposed tariff increases outlined by the municipality. Image: Supplied The eThekwini Municipality's R70.9 billion proposed 2025/26 Medium Term Revenue and Expenditure Framework (MTREF) budget is being scrutinised by ratepayer associations. The MTREF reports will be discussed at a council meeting on Monday for approval. The proposed budget was approved by the Executive Committee (EXCO) on Friday. The municipality stated that the budget is shaped by extensive public consultations and National Treasury guidelines and that the budget prioritises infrastructure reconstruction, following recent storm disasters. It said the budget strengthens trading services and the assurance of sustainable service delivery. The 2025/26 budget comprises a R63.6 billion operating budget and a R7.3 billion capital budget. A significant focus of this MTREF is the reconstruction and rehabilitation of infrastructure damaged by recurring storms, with a 'build back better' approach to mitigate future risks. The budget also emphasises turnaround strategies for trading services to enhance efficiency and improve the quality of life of residents. Acknowledging the economic pressures on households, the municipality has revised several proposed tariff increases, following an extensive public participation process held from April 22 to May 17, 2025. Key adjustments for the 2025/26 financial year include: Assessment Rates: The increase was reduced from 6.5% to 5.9% Water Tariff: Residential increase reduced from 15% to 13%, and business from 16% to 14%. Sanitation Tariff: Residential increase reduced from 13% to 11%, and business from 14% to 12%. Refuse Tariff: Domestic increase reduced from 9.9% to 9% Electricity Tariff: Set at a 12.72% increase, as guided by the National Energy Regulator of South Africa (NERSA). The R7.3 billion capital budget will be funded through a combination of grants (R3.24 billion), internal funding (R2.06 billion), and external borrowing (R2 billion). The budget formulation process included comprehensive public hearings across all regions and engagement with various stakeholders, including business and traditional leaders, as well as opportunities for comment through multiple media platforms. The municipality stated that public concerns, such as high tariffs, road rehabilitation, housing project progress, and maintenance of social facilities, were taken into consideration, leading to amendments to the proposed budget. eThekwini Mayor Cyril Xaba said that following a benchmarking engagement on April 23, the National Treasury found the budget to be credible, relevant, and sustainable, while noting areas for improvement in the Municipal Standard Chart of Accounts data. Asad Gaffar, chairman of the eThekwini Ratepayers Protest Movement, said they still object to the proposed tariff increases outlined by the municipality, in the context of a deepening affordability crisis, increasing resident debt, and ongoing failures in service delivery. Gaffar said the ERPM finds these proposed increases both indefensible and unsustainable. The ERPM concerns were affordability crisis, escalating debt levels, service delivery failures, and lack of accountability. It continues to push for oversight of contractor and municipal projects. 'All proposed tariff adjustments must be suspended until there is clear evidence of improved service delivery and proper use of current revenue. The municipality must provide full disclosure on how previous tariffs were allocated, with a detailed plan for how any future increases would be used,' Gaffar said. Ish Prahladh, from the eThekwini Ratepayers and Residents Association (ERRA), said they have submitted a lengthy list of objections concerning tariff increases from all the ERRA affiliates. [email protected]
Mail & Guardian
21-05-2025
- Business
- Mail & Guardian
Joburg and Durban residents fume over municipal hikes
(eThekwini Municipality) Durban and Johannesburg residents and property owners are fuming over proposed property rate, electricity, water and sanitation tariff hikes, saying they face an affordability crisis and that their cities' crumbling services delivery does not warrant the increases for the 2025-26 financial year. Both the The ERPM is outraged by 'We hereby register a formal and unequivocal objection to the proposed tariff increases outlined by the eThekwini municipality. In the context of a deepening affordability crisis, increasing resident debt, and ongoing failures in service delivery, ERPM finds these proposed increases both indefensible and unsustainable,' the movement's chairperson, Asad Gaffar, wrote in its objection letter. He described ratepayers' grievances as encompassing an affordability crisis that leaves residents unable to meet existing service costs, escalating debt levels that risk locking households into prolonged financial hardship, service delivery failures marked by 'contractor irregularities' and 'questionable municipal spending' that eroded public trust. 'The municipality has not demonstrated how prior tariff revenues have been applied to deliver on the Integrated Development Plan (IDP). In the absence of financial transparency, any request for increased revenue is unacceptable,' Gaffar wrote. Ratepayers also called for tighter oversight of contractors, and a formal role for ratepayers in approving municipal projects. 'We will not accept continued financial burdens on residents without accountability, transparency, and meaningful reform,' Gaffar wrote. This week, he told the Mail & Guardian that the movement was also demanding a moratorium on tariff hikes, because many pensioners,and people who had lost their jobs were already in a collective R30 billion arrears. 'It's one of the reasons the city is struggling to collect revenue. Most individuals are in debt because they have no other choice. They cannot pay for services. Anyone who's in debt makes a psychological choice. When that amount is affordable or unreasonable, they just simply ignore it and wait for the consequence,' Gaffar said. 'That's exactly what's happening with people at the moment, they have a choice between buying food or paying for services and, in most instances, they can't even afford to pay for services.' He said the city needed to reexamine how it determines who qualifies as indigent in terms of tariff exemptions because many unemployed or retired people live in homes over a certain value and are excluded from these tax breaks. 'The municipality is then saying 'if you can't afford to pay for services then sell that house and move somewhere else'. The question is: move out and go somewhere else, where? The fact that the employees of the city themselves cannot afford to pay for services, tells you there's a problem.' The city's budget consultation process was also inadequate, Gaffar said. 'The municipality doesn't understand what public participation means. They simply come there, tell you what they're doing. They tell you what the budget figures are and, more often than not, the individuals at the meeting start to complain about services. 'What the municipality does is have these meetings more often than not in areas where there are no working citizens. They use that to say, 'of the 100,000 people who attended these budget meetings, 5% will complain'.' eThekwini mayor Cyril Xaba announced a 50% cut in arrears debt owed to the city subject to conditions including that debtors settle the balance in full to obtain the discount. eThekwini spokesperson Gugu Sisilana declined to comment on the movement's objection. 'We are not going to single out any ratepayer association by discussing their objections as the city conducted budget /IDP roadshows across the length and breadth of the city and is considering all objections/comments received,' she said, adding that the outcome would be communicated during a full council meeting. In Johannesburg, the city's draft budget for 2025-26 proposed increases of 4.6% for property rates, 12.41% for electricity, 13.9% for water and sanitation and 6.6% for refuse removal. The The association raised concern about policy changes, particularly the restriction of the R300 000 residential threshold rebate to a single property per owner. 'This change will disproportionately affect affordable housing providers,' the association's general manager, Angela Rivers, wrote in the objection letter, noting that 'the financial benefit of the rebate does not accrue to the property owner as profit'. 'Instead, it subsidises operational costs and allows landlords to maintain below-market rentals for low-income residents,' she said. Without the rebate, tenants faced higher rents, risking 'displacement and affordability collapse in formal rental housing'. Equally contentious was the proposed 'non-maintenance' penalty tariff, which the association said was 'flawed and likely unconstitutional'. The tariff aims to charge properties deemed 'not maintained' rates of six times the standard residential rate. The association has warned that the proposal risks accelerating the decline of the inner city, 'with knock-on impacts for crime, unemployment, and spatial inequality'. 'This violates the principles of administrative justice,' Rivers said, warning that it could punish owners of hijacked or distressed buildings, chilling investment in urban regeneration. She added that Johannesburg faced a housing backlog of more than 459 000 units and the city could not afford to alienate the very sector helping to address this shortfall. The association objected to the 12.41% increase in electricity tariffs and the introduction of a R130 or R200 per-unit network capacity charge for electricity reseller buildings. 'The imposition of this charge undermines the policy rationale for the reseller model,' it argued, noting that it amounts to 'double-recovery' because property owners already cover infrastructure costs. Data from the association's member buildings shows tenants consume an average of 98-159 kWh a month, Rivers added, well within the low-usage threshold, making the fixed charges 'regressive' and 'disproportionately burdensome' for low-income households. The association is working on an affordable housing tariff for presentation to the She said there was little transparency on how public input is processed or incorporated into final decisions, 'which makes it difficult to assess the true impact of engagement' with the city. 'Until the final tariffs and IDP are published, we can't say whether our comments were meaningfully considered. Public consultation is only sufficient if it leads to real results — and for that, we'll have to wait and see,' Rivers added. City of Johannesburg spokesperson Nkosana Lekotjolo did not respond to the M&G's request for comment on these objections but pointed to budget documents highlighting the tariff increases, saying the budget speech would be presented next week. Comparing these costs across three major metros, eThekwini has imposed the highest property rates increase at 12.9%, nearly double Johannesburg's 7.5% and above Cape Town's 7.9%. For electricity, Durban leads with a 12.72% hike, followed by Johannesburg at 12.41% and Cape Town at 2%, markedly lower than Cape Town has also proposed several new policies that would see tariffs, such as water and sanitation, rising steeply for mid- to higher-end valued properties as it seeks to link charges to property valuations. These include water and sanitation tariff increases of 7.3% and 11.1% respectively, with additional fixed charges now based on property value rather than connection size. For example, a property valued at R5 million may face a fixed water charge of R548.87 a month plus usage costs. A new city-wide cleaning tariff has also been proposed based on property value, replacing its previous property rates funding model.
IOL News
16-05-2025
- Business
- IOL News
Westville Ratepayers Association vows to continue oversight after court ruling
Asad Gaffar, the chairperson of the EThekwini Ratepayers Protest Movement (ERPM) and Westville Ratepayers Association said they will continue to hold the city accountable and advocate for the responsible management. Image: Tumi Pakkies/ Independent Newspapers The Westville Ratepayers Association (WRA) say they will continue to push for oversight in the eThekwini Municipality despite the Durban High Court dismissing their application to declare he rates charged for the financial years from 2005 to 2008 unlawful and not due to the municipality. According to the municipality the application was occasioned by an investigation report commissioned by the WRA which found that the municipality did not comply with all relevant legislation which required it to publish the rates promulgation in the Provincial Gazette. The municipality stated that they disputed this and contended that it had complied with the Municipal Finance Management Act (MFMA) and published the promulgation in the Gazette. According to the municipality, the Judge who presided over the case on Tuesday stated that this assertion was not disputed by the applicant. 'Furthermore, the Judge said that leaving aside that the application was based on a meritless investigation report, I disagree with the applicant that the municipality was obliged to comply with all relevant legislation in promulgating rates,' the municipality stated. Reacting to the judgement, eThekwini Municipality Mayor Councillor Cyril Xaba, said the municipality welcomed the judgement as it demonstrates the city's commitment to conduct its business within the framework of the law. 'Residents must rest assured of our commitment to run a clean, accountable and transparent administration,' said Xaba. Xaba added that he strongly believed in the constructive resolution of disputes and that if residents are not satisfied with the manner in which the municipality runs its affairs, his door remains open for engagements. Video Player is loading. 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Next Stay Close ✕ Asad Gaffar, the chairperson of the WRA and the eThekwini Ratepayers Protest Movement (ERPM) said they were disappointed but undeterred by the recent dismissal of its main application regarding the rates promulgation matter. Explaining further, Gaffar said that although the WRA's application to strike out certain contentious portions of the City's answering affidavit was however successful, it ultimately did not sway the result in the main application. 'Despite the outcome in the main application, we remain committed to championing good governance, ethical leadership, and curbing fruitless and wasteful expenditure. The municipality's infrastructure continues to deteriorate at an alarming rate, with water loss reaching a staggering 58%.' Gaffar went on to state that the 2025/2026 budget is unrealistic, unachievable, and unaffordable. Gaffar said that public participation was inadequate, rendering the process a mere formality. 'We welcome the mayor's open door policy and agenda for renewal, but actions speak louder than words. Ratepayers deserve transparency, accountability, and effective governance. We will continue to hold the city accountable and advocate for the responsible management of our resources,' Gaffar stated. Gaffar further stated that the absence of a cost order against the association acknowledges the public interest in this matter. 'The outcome is neither a win for the city nor is it a loss for the Westville Ratepayers Association. Together, we can demand better governance and ensure our city's resources are used effectively,' Gaffar said.
