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eThekwini Municipality > City Government > Administration > Office of the City Manager > City Managers Blog > Posts > Cost effective municipal efforts show dividends
August 12
Cost effective municipal efforts show dividends

We are certainly living in tough and unpredictable times. Who would have thought a few years ago that Climate Change was no longer simply speculation but now part of our reality. It certainly seems like the weather patterns are changing – rain when we least expect it, snow blanketing the midlands, beautifully crisp and sunny winter days followed by very, very cold conditions! And stock markets taking a real beating internationally, but leading to our own blue chip companies being on the receiving end of problems created elsewhere in the world.

Every day new theories abound on the relative strength of the PIGS (Portugal, Italy, Greece and Spain) and with the downgrading of the USA credit rating, the world as we know it seems to be turning upside down. Our national leadership, quite correctly I believe, are ensuring that we focus on what most economists view as the future direction the world is taking where the lead comes from the Brazils, Indias, Chinas and Russia of the world. And so for us, IBSA, BRICS and such combinations will hopefully allow us to weather the economic storms raging on the world markets. Balance In eThekwini we have to be mindful of these global shifts as we try and model the best financial scenarios going forward for our city.

We certainly know that it is not just the poor that require developmental solutions from us, but the many middle-income ratepayers are feeling quite stretched in meeting their everyday costs. We have tried our best to ensure, however, that we provide realistic solutions going forward. We firmly believe that our focus on trying to find the best financial balance between the economic, social and Environmental needs of our city when coupled with ensuring that we increase our provisions for maintenance place us in the best and most realistic and advantageous position going forward. Cost Comparison Having said this, it was good to also see that compared with other metropolitan areas in South Africa, we come out very favourably in a municipal cost comparison. National Treasury, in their 2011/2012 assessment of municipal expenditure compared average costs in each of the metropolitan areas.

If we take the three largest cities – eThekwini, Johannesburg and Cape Town— the average costs of monthly household bills (see sidebar) are R2083.56, R2153.55 and R 3080.51 It is not simply the fact that eThekwini is the lowest average monthly cost per household that we should be noting, but that included in our costs are provisions already made for reducing future increases to the extent that we can. For example, over the past three years we have spent over R3 billion in gutting and replacing our water pipeline, something no other city has done.

This is already reducing nonrevenue water loss and will be of great benefit going forward as other cities try and address their old infrastructure. And our budget of more than R3 billion we are spending on upgrading our electricity infrastructure will show great dividends in the next few years.Best governed Johannesburg's billing challenges around rates and consolidated billing may well impact on their rates going forward. Having said this we are trying to do everything we can to keep cost increases within reason and hope that going forward we remain South Africa's best financially governed municipality.


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