Cape Town – Former mayor Patricia de Lille says Capetonians do not deserve “immorally” high water charges and must punish the DA at the polls for how they have exploited the poor and vulnerable.
De Lille’s comments follow rating agency Moody’s Investors Service (Moody’s) report that high water tariffs, introduced to encourage water conservation, increased the City’s revenue from water sales by 7%, reaching R4.4 billion.
Moody’s earlier this month changed the outlook on the City’s rating to stable from negative and affirmed its long-term issuer and senior unsecured debt ratings.
“Overall, the city’s operations remained consistent with previous years and showed little signs of negative impact from the water crisis. Cash generated from operations increased by 13% to R7bn supporting an improved liquidity ratio of 1.8x in fiscal 2018 from 1.4x in fiscal 2017,” Moody’s said.
Just weeks before the May 8 general elections, deputy mayor Ian Neilson, who the DA-led City tasked to handle the drought situation, yesterday laid the blame at De Lille’s feet for not increasing water tariffs when it had become essential for the City to do so.
“This is not profit. This is income derived from water services and it is used to provide reliable water services,” he said.
“It was under my leadership that the City managed to obtain the finances needed in order to stabilise its performance. The previous mayor had declined to increase the tariffs when it had become essential for the City to do so in light of the extraordinary drought that the City was experiencing.”
The Moody’s report is an independent analysis of the performance and management of the City and the positive rating opinion is good news for residents and ratepayers, he said.
However, De Lille hit back, saying she was always in support of water restrictions to reduce water use but did not support the “astronomical” tariff increases that the DA caucus voted in last year.
“I had proposed a temporary R150 a month drought tariff, to be in place for 150 days, to cover the predicted R1.6bn shortfall in funding as a result of reduced water use. Low-income households and small businesses were to be protected from these charges,” De Lille said.
The temporary drought levy was opposed by the DA caucus and replaced with a more permanent pipe levy charge, together with steeply escalating costs for water, she said.
“My pleading for relief for the poor and for households who were already saving water were ignored and instead used by DA councillors to launch a Motion of No Confidence (MONC) against me.
"In motivating for the MONC, the DA said I was being ‘financially reckless’ and that this income would be impossible to replace otherwise”.
Those statements were shown to be lies, she said, citing Moody’s report.
“These profits are the unjust windfalls of the immorally high water costs that were forced through last year by the DA-controlled council, in spite of my pleading.”
Mayco member for Water and Waste Xanthea Limberg said the City’s Draft Water Strategy closed for public comments on March 15 and explained that new surface water resources were limited.
Therefore, in future, a greater proportion of Cape Town’s water demand would be met from alternative sources including groundwater, water reuse and desalination.
“Based on scenario analysis, the City commits to increasing available capacity by more than 300 million litres per day over the next 10 years,” Limberg said. The current indicative cost of this programme is R5.4bn.
Sandra Dickson, of the STOP COCT action group that led the charge in defeating the City’s initial proposed drought charge, said the City could appease a credit rating agency like Moody’s, but it had been done against a backdrop of tremendous hardship for the public that had to foot these bills.
“This is a pat on the City’s back, but at what cost to the public? At the same time it has dropped the ordinary citizen into debt to such an extent that the City had to up their support to people who cannot pay their bills by an additional R300 million to reach R3bn for 2018/19.”
The ANC in the Western Cape said President Cyril Ramaphosa had thrown his weight behind its class action to challenge the constitutionality of the City’s Water Amendment by-law, as well as the decision to hike water tariffs.
The party launched a drive to collect as many signatures as possible from people who want to join in on the action. The ANC would be approaching the Western Cape High Court for a hearing date by April.
They want a court order scrapping all the increases, instructing the City to use the profit it made off increased water tariffs to wipe out all arrears.