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Joburg tables R83.1bn budget aimed at tackling infrastructure and service delivery issues

Joburg tables R83.1bn budget aimed at tackling infrastructure and service delivery issues
Illustrative image: Johannesburg Water Crisis (Photos: Rawpixel | Kabelo Mokoena | Wikipedia | Supplied)

The city, with a population of more than six million, faces myriad challenges including fiscal pressure, crumbling infrastructure, service delivery and revenue collection problems and the provision of electricity and potable water.

Residents of South Africa’s richest metro will feel the pinch when Johannesburg’s electricity tariffs increase by 12.7%, water by 7.7% and rates by 3.8% as of 1 July. The city’s finance MMC, Dada Morero, announced these increases on Tuesday when tabling an R83.1-billion budget – up from the previous financial year’s R80.9-billion. 

Morero’s 36-page budget was tabled under the theme “An inclusive budget that leaves no one behind”.   

The city, with a population of more than six million, faces myriad challenges including tight fiscal pressures, crumbling infrastructure, service delivery and revenue collection problems and the provision of electricity and potable water. 

“We understand our challenges, that the city is struggling to raise its revenue capacity that needs to be supported by continuous investment in refurbishing and replacing infrastructure that maximally responds to the needs of our residents…

“To systematically address these challenges, difficult choices and trade-offs had to be made to ensure that the budget priorities and investments in the city’s IDP [integrated development plan] programmes drive revenue improvement, curb leakages, whilst being mindful of the developmental needs in Johannesburg,” Morero said. 

In February, Daily Maverick reported that all three Gauteng metros – Johannesburg, Ekurhuleni and Tshwane – were in deep trouble after National Treasury announced its intention to deprive them of a combined R1.83-billion in development allocation grants because of underperformance.

Read more in Daily Maverick: Short-changed — National Treasury threatens to halt more than a billion rand to Gauteng metros 

Electricity remains Johannesburg’s biggest headache and residents often have to endure intermittent supply and incorrect billing, with some resorting to legal action. At the same time, electricity is the city’s largest revenue source and is expected to generate revenue of R21.5-billion in this financial year.  

Morero announced that City Power’s R22-billion operational budget would be used to meet daily service delivery needs, including buying power from Eskom, fixing and installing streetlights, responding to service failures, carrying out preventative maintenance and protecting infrastructure from theft and vandalism.

Eskom vs City Power

City Power is being taken to court by Eskom over its escalating debt, now R1.073-billion. Eskom said recently it had been left with no choice but to apply for a declaratory order to force City Power to pay what it owes.   

The City will oppose the Eskom application and in a counterstatement argued that it was owed R3.4-billion in overcharges over the years. 

Morero said the City would appoint an independent mediator to resolve the current impasse. “As such, the aim of the mediation is to find a mutually acceptable settlement and avoid lengthy and expensive legal proceedings.”  

Although there had been no load shedding for 48 days, Morero said the survival of the City’s business customers was at risk. To mitigate against this risk, he said, City Power had approved and implemented the Integrated Energy Resource Plan (IERP).  

The plan is intended to change the existing business model and over-reliance on Eskom, providing customers with tariff-reducing solutions and, where possible, shielding them from continual load shedding. 

“There is no reason why we cannot explore avenues that help us to reduce our dependence on Eskom, avert load shedding and at the same time retain our customers. We need a sustainable energy strategy for the future,” Morero said. 

Johannesburg budget Morero

City finance MMC Dada Morero. (Photo: Julia Evans)

Water 

In March, Johannesburg’s water system came close to collapse. Morero said Johannesburg Water’s operational budget of R18.3-billion would be used for programmes including water quality assurance, quality sewerage service, water demand management systems and the prevention of infrastructure theft and vandalism. 

The entity was further allocated a R4.5-billion multiyear capital budget.  

“The allocation is aimed at carrying forward projects that investigate the maintenance and upgrade of existing water bulk infrastructure.”

The focus, the MMC said, was on the upgrading and renewal of networks, the expansion of wastewater treatment works, reservoir storage capacity and water demand management initiatives. The City intends to replace 77.8km of water networks and 73.6km of sewerage networks in the next five years.  

“These projects will position the City of Johannesburg to be the preferred investment destination, based on its ability to offer business opportunities through infrastructure,” Morero said. 

 Other key allocations include: 

  • The Transport Department is allocated a multiyear capital budget of R1.2-billion. Projects include bringing the Rea Vaya Phase 1C infrastructure to operational readiness;
  • Johannesburg Roads Agency is allocated a three-year capital budget of R2.2-billion and an operating budget of R1.6-billion for the 2024/25 financial year;
  • Public Safety is allocated a three-year capital budget of R157-million. Projects include R9-million for standby generators for fire stations across the city; R19-million for firearms for recent recruits; and R42-million to continue with the Integrated Intelligence Operations Centre;
  • Pikitup, with a mandate of waste management and environmental protection, has been allocated an operating budget of R4.4-billion and a three-year capital budget of R1.1-billion; and
  • The Human Settlements Department has been allocated an operational expenditure budget of R1.2-billion for 2024/25, and a multiyear capital budget of R3.4-billion over the medium term.

‘Election budget’

The DA’s caucus leader, Belinda Kayser-Echeozonjoku, said Morero’s budget was “an election budget and not a people’s budget”. 

“We must say that the DA is quite disappointed because the MMC really had an opportunity this time around to show us something different. Not only was it a lot of smoke and mirrors, but the MMC has basically just shown how little regard this current administration has for the residents and ratepayers.”  

Despite this, Kayser-Echeozonjoku commended Morero’s effort to meet all political parties to hear their concerns and priority areas.  

ActionSA’s Lukhanyo Gantsho said the budget lacked substance. “We are, however, not surprised by the attempt to distract us from the lack of substance contained within the speech itself that necessitated the theatrics and gimmicks. 

“Anyone paying close attention to what was said would be at pains to explain how the city intends to solve any one of its myriads of problems. As ActionSA, we will be exposing the shallowness of the budget when it comes to fixing the City of Johannesburg.” DM

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Comments - Please in order to comment.

  • Denise Smit says:

    R19 milj for firearms for who (recruits?) to do what? Can we have this info please. Is the City going to fund Lesufi’s project?

  • Neil Smith says:

    Someone please explain to me how electricity is the city’s largest revenue source and is expected to generate revenue of R21.5-billion in this financial year but at the same time City Power, which supplies and manages electricity in the city, has an operational budget of R22-billion??

    Also, how can it be that there were increases of 12.7% for electricity, 7.7% for water, and 3.8% for rates, but only an extra R2.2-billion is raised??

    The numbers aren’t numbering :”D

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