Skip to main content

Businesses pay double for basic services - CEO

| Economic factors

It is not sustainable to expect commercial and certain residential property owners to subsidise a dysfunctional municipal system, according to Izak Petersen, CEO of the JSE-listed Dipula Income Fund.

"Something has to give. Many property owners are forced to pay for private sector suppliers to deliver the same services they had already paid municipalities for, but did not receive," said Petersen.

He pointed out that slow economic growth and high operating cost inflation are challenging the commercial property sector and placing strain on South African business.

Some of the biggest challenges are due to rates, taxes and electricity costs.

"Despite ongoing above inflation increases of charges for services, the continued weak state of service delivery by municipalities means property owners and tenants alike have to dig deeper into their pockets to fill the basic services gap," said Petersen.

Money paid to municipalities for this purpose appears to be disappearing into a black hole with generally scant, if any, services delivered, in his view.

With Dipula’s exposure to multiple municipalities across all nine provinces, Petersen is clear that this situation is the rule, not the exception.

He is adamant that local governments cannot continue to dodge their responsibilities to deliver services at the cost of business, and a significant improvement is needed quickly.

Pin It

Related Articles

South Africans are resilient people who are always ready to seek solutions for problems, even if the trials they face are caused by events that are beyond their control. An empowering example of this approach to life is the use of grocery stokvels...
In response to rising food costs, The SPAR Group offers practical tips for beating food inflation through savvy shopping and creative cooking.
By: Myles Illidge – MyBroadband South Africa’s Road Accident Fund (RAF) tax and General Fuel Levy (GFL) add between R272 and R483 to the price of a tank of fuel, depending on the size of your car’s tank.
By: Shaun Jacobs – Daily Investor Major changes are coming to VAT in South Africa, with the government looking to expand the range of food items exempt from the tax. 
By: Hanno Labuschagne - MyBroadband An anticipated strengthening of the rand and slipping global oil prices could result in lower petrol prices at the pumps next month.