Mayor’s Newsletter for George Herald of 10 March 2022
An interesting discussion for George is the confluence of semi-gration attractiveness, managing the infrastructure and stimulation of economic activity.
In recent months there have been numerous media articles about semi-gration activity in South Africa where families are moving from metropoles and areas where service delivery standards are slipping and re-locating to small cities that are considered to offer a better quality of life. Conversation with estate agents indicate that there is a flurry of inward migration into George.
When cities become magnets, it is important to recognise the importance of maintaining and growing the infrastructure base. George has been confronting the trial of growing infrastructure as firstly the Outeniqua Waste-Water Treatment Works is being refurbished and expanded with completion a year away. In March 2021 we faced the tough dilemma of how to fund the expansion to the Water Treatment Works. We knew that such a project would place extreme pressure on funding capacity and on tariffs. The strategy in applying for and the success in receiving grant funding should not be under-estimated.
With this R1200 million project now underway (the first R81m is due to be spent by June 2022) it is worthwhile considering the benefit of this project to George. If George had to self-fund this project over 15 years, the water tariff would have had to be increased by R9 per Kilolitre (or by 50% of the present basic tariff of almost R18 per Kilolitre) on each of the 8,853m Kilolitres as used in 2020-21 and over a 15-year period. This provides a perspective of the cost savings to ratepayers resulting from the grant. This however is before considering the renewal costs still to be incurred in coming years on refurbishing the 990 km network, reservoirs, etc.
A condition of receiving this grant is that a Cost Benefit Analysis has had to be undertaken to ensure that the project demonstrates that the return on the investment provides a net present value. The consultants have done this study based on the assumption that 35000 houses will be built over the next 20 years with at least 52% being middle to higher value housing.
This analysis implies that sufficient economic development will take place to provide employment so that services can be delivered and paid for. Quite often I hear comments from residents who are uncomfortable to see George grow. The reality is that if towns do not provide work for their residents, they start stagnating and are unable to generate sufficient revenue to maintain and refurbish their infrastructure.
The developments described here illustrate the complex balance and responsibility we all must collaborate in constant renewal through in-migration, growing economic activity and improving infrastructure.