Borehole water or not, farmers should pay extra for water – City of Cape Town

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CAPE TOWN – Even though farmers use borehole water for their production, they will be affected by the proposed drought charge, the City of Cape Town confirmed.

The City recently proposed that a drought charge is needed to make up the deficit in the City’s revenue which emanates from residents’ water savings and paying significantly less for water and sanitation.

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As a result, the City’s water and sanitation department projects a deficit of R1.7 billion for 2017/18 in the region. This municipality claims that without this income, water and sanitation service delivery would be affected.

ALSO READ: Seimens Airdrop Initiative hopes to help CT drought

According to Farmer’s Weekly, councillor Johan van der Merwe, the City of Cape Town’s mayoral committee member for finance said, “All properties within Cape Town municipality’s boundaries on which rates were levied, would be affected by the drought charge if it was approved”.

Van der Merwe added, “The owner of a farm will be charged according to the valuation of the agricultural land and, if applicable, the commercial activities taking place on the property. Farms are valued purely on their agricultural value derived from comparable sales of the different farming types within the area”.

ALSO READ: Gigaba to Cape Town’s drought rescue

“The drought charge will be a temporary additional charge based on existing property valuations that will assist with the City’s budget shortfall,” City’s Mayor, Patricia de Lille said in a statement.

De Lille said the income from the drought charge is needed to ensure that the municipality can operate the reticulation network that supplies drinking water to residents.

Only 464 200 households in the city out of a total of around 707 800 households will be affected by the charge. Of these, only around 52 500 will pay more than R150 per month. The rest will pay less than this. The average charge per month for non-indigent households will be R73.

A sample municipal bill illustrating how the charge would be levied, according to Farmer’s Weekly

Portion of the Farm Valuation Rates Calculation Rates Payable for 30 day month Drought Charge Total after drought charge
Agricultural R40 000 000 ((40 000 000 * 0,001343)/365) * 30 R4 415,32 R441,53 R4 856,85
Commercial R1 200 000 ((1 200 000 * 0,013434)/365) * 30 R1 325,00 R132,50 R1 457,50
Total R41 200 000 R5 740,32 R574,03 R6 314,35

The comment period on this proposal has been extended by the City until midnight on Monday 15 January 2018.  

The Council will table the drought charge for its consideration at the end of January as part of the adjustments budget, and the Minister of Finance, Melusi Gigaba is subjected to approval of the drought charge proposal.

Top story: Early debit order collections may soon be booted out

– BUSINESS REPORT ONLINE

Source: IOL – Markets
Borehole water or not, farmers should pay extra for water – City of Cape Town


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