City of Cape Town’s new tariff structures for water and electricity unconstitutional, warns AfriForum
The City of Cape Town’s plans for the implementation of new tariff structures for water, sanitation and electricity are in breach of municipal legislation and the Constitution, warns civil rights organisation AfriForum. The organisation voiced its opposition to the proposed structures in its official comments on the metro’s 2025/2026 draft budget. In it, AfriForum warns that the plan to use property valuations as the basis for water and sanitation tariffs, as well as the restructuring of the metro’s electricity tariffs without the necessary cost-of-supply (CoS) study, poses serious disadvantages for the Mother City’s homeowners.
Jurie Ferreira, AfriForum District Coordinator, says the proposed tariff structures amount to arbitrary cross-subsidisation, place an unfair financial burden on owners and consumers and will potentially violate legislation and policies.
AfriForum supports the principle of charging for services linked to the use thereof as prescribed in Section 74(2) of the Local Government: Municipal Systems Act. According to this section, tariffs must be equitable and reflect the cost of providing the service as well as its use. Ferreira emphasises that linking charges to property valuations is contrary to the provisions of the act.
“Linking the water tariff to municipal property valuations, rather than to measurable consumption or the cost of providing the service, violates this provision of the Municipal Systems Act and disregards the principle of cost-reflective tariffs on services,” Ferreira explained. “The City of Cape Town has also not provided any technical justification or econometric analysis to justify its proposed water tariff model. This raises serious questions about the legality of the model.”
In addition to the City of Cape Town’s plans to implement water charges linked to property valuations, the metro also intends to review its electricity tariff model. However, this adjustment would, due to the absence of an approved CoC study, contravene the Electricity Pricing Policy (EPP) of the Department of Mineral Resources and Energy.
Furthermore, the metro has also proposed the introduction of a new city-wide cleaning charge in its budget. According to the metro, this will also be levied on the value of property and will be used to clean up parks, sidewalks, taxi ranks and informal settlements throughout the metro. Ferreira explains that the introduction of this proposed levy would be unfair, as the costs of these municipal services are already levied as part of property rates and should therefore already be used to benefit the broader community.
In its comments on the draft budget, AfriForum provided several suggestions. Firstly, it requested that the metro review the proposed water and sanitation levy linked to the value of the relevant property and bring it in line with the requirements of the Municipal Systems Act. Furthermore, the civil rights organisation demands that the City of Cape Town provide the most recent CoS study, which complies with the requirements of the National Energy Regulator of South Africa (Nersa), as justification for the proposed electricity tariff model; and if this cannot be done, that the proposed model be removed from the budget until the requirements are met. The organisation also requested a meeting with the metro to discuss these and other issues in the draft budget.
“We strive for a collaborative approach with the City of Cape Town, but the metro’s actions must be based on legality, transparency and community interest. When tariffs exceed the principles of law and reason, the public has both the right and the duty to act. We are prepared to engage with the metro, not just as critics, but as partners in a shared vision for a fair, sustainable and service-orientated Cape Town,” Ferreira concludes.
Get involved with your nearest AfriForum branch today. Visit Sluit-aan.afriforum.co.za for more information.
