Palesa Phili, chief executive of the Durban Chamber of Commerce and Industry NPC voiced busineses concerns on the eThekwini Municipality’s proposed tariff increases for 2026/2027.
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The Durban Chamber of Commerce and Industry (DCCI) NPC was concerned about the investment in GO! Durban and 53% Non-Revenue Water in their objection to the eThekwini Municipality’s proposed tariff increases for 2026/2027.
The municipality proposes tariff increases for residential water (15% residential and 16% for businesses), electricity (10.5%), property rates (5%), sanitation (13%) and refuse removal (13%). The total draft budget for 2026/2027 comprises a capital allocation of R5.9 billion and an operating budget of R68.8bn.
Palesa Phili, CEO of the Durban Chamber of Commerce and Industry (DCCI) NPC, believes that the proposed tariff increases for 2025/26 cannot be justified, considering the current state of service delivery and economic conditions.
The DCCI said more can be done if the municipality could deploy financial resources towards priority areas and take decisive steps to eliminate wasteful expenditure.
“The proposed tariff increases exceed inflation, which negatively impacts the cost of doing business in Durban. Tariffs must be significantly reduced. The increases will negatively impact the competitiveness of eThekwini as a business location. Businesses will simply disinvest or consider more lucrative and cost-effective investment destinations,” Phili said.
eThekwini Mayor Cyril Xaba said that a strong turnout of business leaders attended the draft 2026/2027 Integrated Development Plan (IDP) and Budget consultation meeting with municipal officials on Monday.
Xaba added that it has been a challenging budget to balance, given the global and domestic economic climate.
“We have placed a strong focus on upgrading infrastructure, accelerating service delivery, and investing in catalytic projects, particularly those that create employment,” he added.
Xaba said that the budget introduces a range of initiatives to stimulate economic activity and enhance the ease of doing business. Key focus areas include infrastructure improvement, support for Small, Medium, and Micro Enterprises (SMMEs), and digital transformation to modernise municipal services and improve efficiency.
Phili said that the DCCI recognised the progress achieved through the work of the municipality, supported by the Presidential eThekwini Working Group (PeWG), in strengthening infrastructure, tourism, business confidence, and safety and security in Durban.
Phili added that organised business welcomed the 14-day SMME payment cycle because it is a progressive step that will enable small enterprises to utilise their resources more efficiently, particularly under current economic pressures.
However, the DCCI emphasises that SMMEs remain the backbone of our economy and more comprehensive support is needed to ensure their growth. The DCCI also welcomed the Economic Development Incentive Policy highlighted in the budget. Phili believes it is policies such as these that will drive business expansion in KwaZulu-Natal and strengthen Durban’s ability to attract investment.
“While we acknowledge that increases from Umgeni and Eskom contribute to the current cost structure, we are confident that charges for refuse removal and sanitation can be reduced substantially to provide some relief,” she said.
“We are willing to engage with the government to identify feasible solutions that serve the interests of both the government and the private sector. At a time when businesses are striving to recover from economic pressures, rising tariffs compounded with rising fuel costs and water disruptions place an undue burden on all enterprises,” she added.
Phili said large businesses may absorb these costs but SMMEs, already struggling to make ends meet, are bearing the brunt. For many, this could even lead to closure.
The DCCI was also concerned about 53% of Non-Revenue Water and believes that this figure can be somewhat higher, given that many of the meters are dysfunctional or not working at all.
“The actions taken thus far are not yielding the desired results, and the government must return to the drawing board to identify effective solutions. A decisive strategy to reduce this figure is essential, as businesses continue to bear the brunt of these costs,” Phili said.
The DCCI was concerned that R150 million had been allocated to GO! Durban, despite seeing limited progress in 10 years. The DCCI stated that the rationale for such continued investment is highly questionable.
“We seek clarity on the status of this project. We believe that these funds could be more effectively directed towards the provision of basic services to both households and businesses,” Phili said.
She said the municipality should increase investment in capital expenditure by more than 8% because businesses, for too long, have suffered from infrastructure backlogs, ageing and dysfunctional infrastructure, and poor service delivery.
“We cannot continue cutting corners, as this approach risks the eventual collapse of our infrastructure. We want a stronger commitment from the government, as the business community expects more investment in our city,” she said.
The DCCI felt that the allocation of R2.45bn for electricity infrastructure and R1.46 billion for rehabilitation, reconstruction, and new access is insufficient, given the ongoing challenges in energy supply and roads.
“We emphasise the urgent need for road maintenance, especially with heavy truck usage on our roads. We firmly believe that targeted capital spend on critical projects and infrastructure reforms will further contribute positively to business confidence,” she said.
Phili said the approval of the Development and Service Delivery Policy Framework will allow the private sector, which has the capital and expertise necessary to expedite infrastructure restoration.
zainul.dawood@inl.co.za