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Businesses and ratepayers in Mthatha and surrounding towns will pay more for water from July after the OR Tambo District Municipality approved an 8.4% tariff increase as part of its 2026/2027 budget.
The increase has drawn criticism from business leaders and residents, who argue it is too steep at a time when many consumers and small businesses are already struggling with rising costs and intermittent water supply.
The district council recently adopted a budget of more than R3.3bn for the new financial year.
Municipal spokesperson Ncebakazi Kolwane said the budget comprised an operating budget of more than R2.1bn and a capital budget of more than R1.1bn.
The capital budget had decreased by R266.4m, or 19%, compared with the 2025/2026 adjustment budget because of reduced conditional grant allocations.
However, the operating budget increased by R149.7m, or 7%, to support service delivery and the operation of critical infrastructure, Kolwane said.
Veteran Mthatha businessman Vuyisile Ntlabati said the tariff increase was difficult to justify given ongoing interruptions to water supply.
“It [the tariff hike] is not reasonable at all. Every two days, there is interruption to the water supply which is not right,” he said.
“This 8.4% is well above the inflation rate. Obviously it will kill a lot of people.
“It should be friendly to our people. One of the primary things about local government is that it should be focused on development of SMMEs.
“But even ratepayers should not feel the pinch.
“This tariff increment is too steep for SMMEs who have been operating under extremely difficult circumstances with very little profits.”
Ntlabati said businesses were already under pressure from rising fuel and electricity costs.
“There is high unemployment here. We have young people who own hair salons and car washes.
“Once they hike prices, people will take the business away and rather just wash their cars at home. People will now close businesses.”
OR Tambo District Chamber of Business secretary-general Dr Andile Nontso said organised business supported efforts to improve water and sanitation services but opposed the increase.
“We do not know what informed that increase during these difficult economic times in SA.
“Petrol and food prices are going up now. Water and sanitation are basic needed services,” he said.
Community activist and ratepayer Phikolomzi Adonis also criticised the increase, saying it was out of step with economic conditions.
“You look at the price of diesel and petrol, it tells you the strain of living is way too high.
“Now this means people who want to increase anything beyond the CPI do not understand the economic climate we are in.”
Kolwane acknowledged that the tariff adjustments were above inflation but said they were aimed at moving the municipality towards cost-reflective tariffs, as encouraged in Municipal Finance Management Act budget circulars issued by the National Treasury.
“The implementation of cost-reflective tariffs is intended to support the financial sustainability of municipal services and the continued operation, maintenance and protection of infrastructure required for service delivery,” she said.
The municipality has allocated nearly R100m to repairs and maintenance in the new financial year — an increase of R29.4m, or 44%, compared with the 2025/2026 adjustment budget.
Kolwane said the funding would be used to maintain water infrastructure and municipal buildings, protect municipal assets, support continuous water provision, strengthen service delivery through fleet investment, provide for disaster response and security services, meet contractual obligations and fund wage increases and other costs.
“The increase in repairs and maintenance funding reflects the council’s continued focus on preserving and protecting critical infrastructure assets.
“It is also intended to move the municipality closer to the recommended maintenance funding norm of 8%, though the current allocation remains below that benchmark.”
She said the budget also provided for initiation rescue support centres, the purchase of additional trucks to support water service provision and an increased allocation of R3m to the Ntinga OR Tambo Development Agency for the Kei Fresh Produce Market.
Mayor Mesuli Ngqondwana said the budget reflected the municipality’s commitment to service delivery.
“Particular emphasis has been placed on maintaining and protecting infrastructure, supporting continuous water provision, strengthening operational capacity and ensuring that essential municipal services continue to be delivered.”
Daily Dispatch
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