Officials of the Sol Plaatje Municipality in Kimberley must stop “talk, talk, talk, and rather do, do, do to turn around the municipality and the city”.
This was one of the requests from the Kimberley Large Business Forum (KLBF), which has requested the municipality to urgently amend its 2024-’25 to 2026-’27 draft annual budget to promote growth in the business sector and halt the noticeable and detrimental decline of the city.
The KLBF comprises 12 large businesses and the Sol Plaatje University (SPU), and it confirmed its “firm support for the substantial proposals” for the Integrated Development Plan (IDP), Strategic Economic Development Plan, Bulk Funding for Infrastructure, central business district clean-up and upgrades, parks clean-up and greening, as well as repairs and recommission of the Homevale and Greenpoint Wastewater Treatment Plants (WTP).
However, the KLBF claims the proposed budget is “a generic hand-me-down budget used for the past two decades”. The KLBF requests mayor Kagisho Sonyoni to review the “flawed and inappropriate” budget before final approval.
The KLBF claims municipal costs to the commercial and industrial sector has caused a steady decline in size and volume for 20 years and longer, resulting in decreased job opportunities and job losses.
Primary reasons for the decline are high electricity tariffs, poor service maintenance and repairs to infrastructure (only 15% is spent on maintenance), employee and councillor related costs (35%), the municipality’s intolerable debtors (accounts receivable) of R3,7 billion (which if not recovered will be a bad debt expense), and electricity and water losses of 40% to 60%.
A major concern is the commercial and industrial electricity tariff with a markup of up to 300% on the rate the municipality purchases bulk electricity from Eskom for commercial industrial customers. It is the highest commercial industrial rates in South African against the average of 14 competitive industrialised cities.
“The excessive effective rate of between R3,50 and R6,50 exclusive of VAT, per kWh is tantamount of being unconstitutional and unsustainable,” the KLBF states.
It suggests the implementation of a Kimberley Special Economic Zone with benefits and financial attractions to attract new businesses and promote existing business to grow bigger and to stay in Kimberley. The KLBF claims the high commercial and industrial electricity tariffs will be the death knell for Kimberley businesses.
Ekapa Mining is the largest employer in the city. Its Kimberley mines will be worked out in 25 years, ending 180 years of continuous diamond mining. The remaining 25 years is enough time to allow for other businesses to grow and prosper to fill the void.
The municipality is losing hundreds of millions of rands in income due to electricity losses of 40% through illegal connections or bypass cables.
The debt to Eskom alone is R1 billion. The KLBF suggests that a dramatic debt collection programme be implemented to recover a minimum of 25% of the debt per year over a few years, and uncoverable debt written of. This income will “easily eradicate” all the potholes and increase road paved area coverage in low-income areas.
Salaries of R820 million are 33% of the total budget – considerably higher than the average of 25% of related municipalities. There are far too few visible traffic officers, resulting in increasing traffic violations and danger to motorists, and a major shortage of skilled engineering and maintenance personnel.
Also, the National Treasury, in its latest review report, stated the municipality’s cash coverage is below the norm.
- Visit NoordkaapBulletin on news24.com under “Publications” for the full story.
