Businesses and residents drowning in increases

FEE SHOCK: Ratepayers and businesses are reeling from the first month of new electricity bills. Picture: SUPPLIED

While residents consider legal action against the electricity increases, businesses are feeling the pinch, with their charges shooting up from R2,500 to approximately R46,000.

From August 1, the electricity basic charges have increased to R432,60 for prepaid consumers, R763,60 for postpaid or credit consumers and R7,294,34 for businesses, vat included.

One local business owner said their operational costs were up from R2,548,74 to R28,750 an increase of 1,028%. The owner said the steep increase threatened the stability of many businesses in the city.

It is anticipated that the economic impact of the increased charges will make the cost of business too high, leading to further unemployment, as businesses are forced to reduce staffing levels or pass the burden of operational costs to consumers.

Local businesses are outraged at what they see as a lack of sufficient consultation.

Earlier this month, ratepayers’ association chairs from Gonubie, Beacon Bay and Quigney met BCM mayor Princess Faku to challenge the implementation of the increases, where it was concluded the municipality would have 14 days to respond.

With the allocated time having lapsed and no change in the stalemate between ratepayers and the municipality, some ratepayers are calling for legal action.

Gonubie RA chair Henri Smit said earlier this month that the association was intent on a legal challenge, while Beacon Bay RA chair, Scott Roebert, said his association remained committed to negotiating but was assisting a local NPO with their attempts to secure an interdict against the charges.

DA councillor Geoff Walton said residents could not be blamed for pursuing legal action, given that some residents had received bills for both pre-paid and post-paid/credit meters, indicating a problem with the reliability of the billing records.

Walton said there was also a case to be made that the municipality’s public participation process was not as thorough as it should have been. The DA has approached provincial government for intervention in the hopes that through political channels, the increases on the basic charges can at least be reduced to affordable levels if they cannot be scrapped.

Walton said that residents must be cautioned that legal action could take time.

Dr Mary Mangai from the University of Pretoria’s school of public management and administration, concurs with this saying that residents need to bear in mind that legal battles can be protracted and that a balanced approach included pursuing legal action in tandem with continued dialogue.

She said: “A prolonged legal battle between the ratepayers and the municipality could have far-reaching consequences.

“Economically, the municipality might have to allocate significant resources to cover legal fees, which could otherwise be used for critical services such as infrastructure maintenance, public safety, and social services. This could lead to a deterioration in service delivery.

“Furthermore, the uncertainty surrounding the outcome of the legal battle could create a climate of instability, which might deter investors and hinder economic growth in the region, making Buffalo City less attractive for investment.

“Socially, a drawn-out legal conflict could polarise the community, exacerbating divisions and leading to social unrest. The dispute over electricity costs, a basic and essential service, could become a symbol of broader grievances.”

She said that had the municipality engaged with the community before implementing electricity cost increases, much of the current discontent could have been avoided.

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