Windhoek increases tariffs
City of Windhoek residents should brace themselves for an increase in tariffs after the City tabled a N$3.8 billion budget for the 2013/14 financial year.
The proposed tariff increases by City authorities will see an average low income household paying N$52.64 more for services rendered while an average middle income household will be set back N$120.37. The average high income household will now have to pay N$252.52 more in charges to fund the City’s estimated N$314 million budget deficit.
Chairperson of the Management Committee Moses Shiikwa told councillors on Thursday when he tabled the budget that the increase in tariffs has been necessitated by increases in bulk water and electricity tariffs by NamWater and NamPower respectively as well as an increase in the Electricity Control Board (ECB) levy and by a new National Energy Fund charge, among other reasons.
NamPower has already been given the greenlight by the ECB to adjust its bulk electricity price by 13% beginning 01 July 2013. In addition, the ECB levy has also been increased from 1.046 cents per unit purchased to 1.50 cents per unit purchased representing a 43% increase.
Furthermore, the new National Energy Fund charge, which has already been approved by the ECB, will also be introduced as from 1 July 2013. This new charge will be levied on electricity consumption at 1.02 cents per kilowatt hour.
Shiikwa said increasing energy demand in the capital has led the City to apply to NamPower for an upgrade of the existing electricity supply capacity of 160MWA to 210 MWA, a project expected to start soon. He said the City was left with no choice but to apply for its own 13% increase in tariffs from the ECB in order to fund the project.
He pointed out that tariff increases have also been necessitated by the current water problems facing the country. Due to the need to upgrade pump stations from Von Bach Dam to Windhoek to cope with increased water demand, NamWater was granted permission by the Ministry of Agriculture, Water and Forestry to increase bulk water charges by 25% for three years beginning last October to recover costs of upgrading the pump stations estimated to cost N$200 million. To cope with the increases from NamWater, the City of Windhoek said it is essential to increase the water consumption and basic tariffs with 15%.
Of the N$3.8 billion budget that was tabled, N$3.2 billion will go towards the operational budget while only N$527 million will go towards the capital budget. N$344 million from the capitaal budget will fund the city’s on-going capital projects while N$183 million is earmarked for new capital projects.
The city said it will prioritise planned expenditure under three main themes which are the provision of municipal services to the informal settlement areas; formalisation of informal areas and the acceleration of land delivery, and enhancing provision of housing to people in the low income categories and maintenance of existing infrastructure.
Shiikwa added that while the City understands the plight of the residents, “however we are left with no option but to consider the above tariff adjustments and do trust that you will bear with us whilst we investigate options to make the services more affordable.”