cities

distribution. Johannesburg’s capital expenditure has increased the most, to over R6-billion in 2014,
matching the 2009 peak. Overall Johannesburg dominates capital expenditure, exceeded only by
eThekwini in 2010 and 2013, and Cape Town in 2013.
Operating expenditure has shown steady growth, driven largely by strong increases in bulk purchases (of
electricity and water) and in employee-related costs across all of the cities (Figure 7.9).
Figure 7.9: Summary of operating expenditure categories (2014)
30
Rand (billions)
22.5
15
7.5
0
JHB CPT ETH TSH EKH NMB MAN BUFF MSU
Employee related costs
Remuneration of councillors
Bad debts
Repairs and maintenance
Bulk purchases
Other operating expenditure
The key cost driver has been bulk purchases of electricity, as the above-inflation tariff increases over a
number of years have had a significant impact on electricity’s share of expenditure. Since 2009, bulk
purchases as a percentage of total operating expenditure has increased by between 1% and 14%
across cities. This has placed pressure on all other operating expenditure, and cities have had to stabilise
or reduce spending in other areas, such as repairs and maintenance and employee costs.
At 5% of total operating expenditure, repairs and maintenance are underfunded across all of the cities.
Since 2009, its share of total operating expenditure has declined by between 5% and 2% in most of
the cities. While saving on repairs and maintenance may be an easy option because the impacts are
not immediately apparent, this strategy will be more costly in the medium term, as deteriorating
infrastructure will have to be replaced rather than repaired.
Despite perceptions about runaway employee costs, most of the cities have stabilised growth in this
expenditure since 2009 (Table 7.3).
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