City of Cape Town unable to spend R520m of its capital grants

Cape Town – The City of Cape Town has not been able to spend R520 million of its capital grants from the province and national government, of which R36.8m was for the upgrade of informal settlements.

The City is requesting a roll-over to the next year, citing the impact of the Covid-19 lockdown on the construction industry. The City will on Thursday be tabling its adjustment budget, which outlines projects that have been severely affected by budget constraints due to the national lockdown.

Deputy mayor and mayco member for Finance Ian Neilson said: “There are a large number of projects and programmes that have been affected across the board. The total amount the City is proposing for roll-over amounts to R520m which is a small percentage compared to the total allocation. Of this, R357.7m relates to conditional grants.”

Neilson said that for the year ending June, the City managed to spend 96% of its total operating budget and almost 90% of its capital budget despite being severely impacted by the Covid-19 crisis and extended lockdown.

Metros around the country have had urban settlements development grants (USDG) reduced significantly.

Mangaung will have a 37% reduction, the City of Ekurhuleni will receive a 6% reduction and the City of Tshwane a 20% cut. The directorates in the City affected the most include Water and Sanitation Department, Human Settlements Department and the Transport Department.

“The City’s main mandate is to deliver basic services within acceptable national standards. To achieve such a high budget spend amid this crisis shows the City is committed to fulfilling this mandate to the best of its ability,” Neilson said.

Mayco member for Human Settlements Malusi Booi said: “The City has already put in place various measures, including the establishment of a panel of contractors which cut delivery times, and also the City’s contract management office helps to manage the vast programmes the City has to roll out.”

Opposition parties in the City council have raised concerns about the roll-over, saying that residents could be forking out more money next year.

Cope caucus leader Farouk Cassiem said: “It’s important to remember that R1.5 billion in grants has been cut. This is a massive amount and the transport directorate will feel it the most.

“We are dealing with a huge financial crisis and the City is dealing with a revenue shortfall. And what we will see next year is more massive increases and residents are going to feel it.”

ACDP caucus leader Grant Haskin said: “I’m deeply concerned about the ethical implications of returning funds to the National Treasury when the needs are so great, especially with Covid-19 and the lockdown. The majority of Capetonians are suffering and the City should be delivering more than ever, not returning more funds than before.”

ANC caucus leader Xolani Sotashe said: “They cannot use Covid-19 to justify their lack of leadership and mayor Dan Plato must explain why they are going to send this money back.”

Cape Argus

c4dc8010 8f77 5d85 ba0d 571fca6f645d - City of Cape Town unable to spend R520m of its capital grants

Leave a Reply