Nelson Mandela Bay council fails in second bid to pass budget

A second attempt to pass the 2025/2026 budget for the Nelson Mandela Bay municipality was unsuccessful due to delays in the integrated development plan.

On Thursday, mayor Babalwa Lobishe announced that, after budget consultations with ward councillors earlier in the week, the budget and integrated development plan (IDP) would be tabled for noting.

“This process is important because we could not bring a budget without the ward-based budgets finding expression.

“We will hopefully bring a finalised budget and IDP in the next council meeting for adoption,” Lobishe said.

The total budget amounts to R21.58bn.

Once passed, residents will pay 12.8% more for electricity, 6% for refuse collection and 5% for property rates.

Water and sanitation charges are expected to increase by 5.5%.

The budget was originally scheduled for approval at the end of May.

However, the council is now required to convene every seven days to note the budget until it is formally adopted.”

The new financial year starts on July 1.

In her opening remarks, Lobishe emphasised the importance of acknowledging the municipality’s financial position, saying the electricity services directorate was under immense pressure due to significant electricity losses.

This seriously affected the municipality’s sustainability.

“This is supported by the fact that the budget for electricity bulk purchases exceeds the total electricity service charges budget.

“This means the electricity service, which is a trading service, is operating at a substantial deficit, requiring support from property rates,” the budget tabled to council says.

In the application to the National Energy Regulator of SA (Nersa), the acting executive director for electricity and energy, Tholi Biyela, stated that the proposed increase was driven by ongoing challenges, including widespread electricity theft, tampering, illegal connections and historically non-cost-reflective tariffs.

With the proposed increase, Biyela said the city would generate an income of R7.56bn for the department that ran at a loss.

“The directorate has been experiencing an increase in electricity losses in recent years.

“The phenomenon of increasing electricity bulk purchases and spiralling decreases in electricity sales has reached unprecedented levels, to the point where the electricity service has become unable to generate revenue or any surpluses,” Biyela wrote.

The city recorded electricity losses amounting to R1.17bn during the 2023/2024 financial year.

On the sidelines of the meeting, some ANC councillors were not happy with the capital project allocations for their wards.

An ANC councillor questioned why his ward received only R3m, while Ward 41 councillor Luyanda Lawu was allocated more than R100m.

“There are many issues in my ward, what am I going to do with R3m?

“We’re being failed by project managers as well as budget and treasury because clearly, there’s favouritism here.”

On Wednesday, the DA convened a media conference, outlining their unhappiness with the budget as well as consultations held with councillors at the 11th hour because of issues raised with the ward-based budget allocations.

Some of the capital projects earmarked for the new financial year include: