Municipal Service Cost Increases, a perfect storm?

Municipal Service Cost Increases, a perfect storm?
July 2019 Newsletter

The Middelburg is caught in a spiral of outside forces; National Legislature dictates municipal services increases, NERSA approved an excessive electricity price increase, and to top it off the fiasco of the Optimum Mine/Tegata that has been dragging on for years.

The inability or unwillingness of the various owners, roleplayers and Department of Mineral to finalise the Tegata fiasco, is having an ongoing impact on our town’s economy.  Middelburg continues to wait for the conclusion of the transactions so that we can get on with our lives.  We are being held hostage by a company that did not have our interest at heart.

Eskom, a significant local employer, supplier, and a corporate company that everybody wants to do business with produce the most expensive input cost in every industry.  The massive electricity increase is now taking effect and is downplayed by the Reserve Bank as a marginal influencer in the rise of inflation.  The country is expected to pay for the continued corruption taking place.  Not only does the electricity price affect households, but it is also the one cost all businesses have. How many jobs will be at risk?  NERSA asked MCCI what our evidence is that the electricity price increase could harm our economy. Are government decision-makers taking uninformed decisions that affect our livelihoods and our quality of life?

Most of the households had a shock when they opened their municipal accounts this month.  To add an R1 000,00  to a household budget already stretched to the limit will have consequences — less spending on luxury items or even day to day items, resulting in a decline in transactions.  We need to protect the businesses, or it could have an impact on the companies and their employees.

It is of the utmost importance that the Tegata/Optimum Mine, and other mines’ issues get resolved as quickly as possible.  The Government needs to find a workable funding model, as continued increases in municipal services will reach a tipping point.  Moreover, Eskom must supply us with cheap electricity to restart our economy.