Rochelle de Kock
THE massive budget cuts announced by the Nelson Mandela Bay Municipality have all but doomed major infrastructure projects meant to improve the lives of hundreds of thousands of people in the city.
The planned eradication of the “bucket system” in the Bay, the building of five new clinics, and improvements to roads and stormwater drainage infrastructure throughout the city are among the projects that have been effectively gutted by municipality budget cuts totalling almost R800-million.
And while municipal cash flow, debt management and the collection of rates have been singled out as key reasons for the massive budget reductions, a chunk of the blame has been laid at the door of the 2010 Fifa World Cup.
According to a financial report due to be presented to the municipal Public Accounts Committee meeting today by chief financial officer Kevin Jacoby, the most significant implications of the cuts are:
– The budget for the eradication of the bucket system – by upgrading and installing sewerage systems in townships, where residents do not have access to flushing toilets – has been slashed from R75-million to a measly R1-million;
– The bulk stormwater projects to improve the city‘s road drainage infrastructure have been reduced by a whopping R48.25-million. Some of the areas affected by the stormwater project budget cuts are: Summerstrand (a R20-million reduction), Zwide (R5-million) and Chatty (R9-million);
– R17.17-million has been taken away from the budget earmarked for the construction of five new clinics; and
– R80-million has been slashed from the budget for tarring gravel roads in previously disadvantaged areas.
Altogether, the nearly R800-million in cuts comprises a reduction of R536-million to the municipality‘s capital budget, which funds long-term projects that are considered an investment in the city, such as roads and other infrastructure, and a R254-million reduction in the city‘s operating budget, which funds general expenses such as salaries, repairs and maintenance.
The municipality receives the majority of its budget from service charges and property rates, followed by funding from the national government.
In the financial report, Jacoby says the chief reasons for the municipality‘s financial mess are: ambitious projects not fully supported by municipal cash flow; inefficient debt collection measures; and inadequate financial discipline.
But another major contributing factor to the metro‘s financial woes was the 2010 soccer World Cup, which saw the municipality forking out an additional and unbudgeted R261-million for construction costs, to ensure the Nelson Mandela Bay stadium was fully compliant with Fifa‘s requirements.
At the time, the municipality said this amount would be refunded by the national treasury and the provincial government.
But yesterday Jacoby said the municipality had little hope of ever recouping that loss from the provincial and nation treasuries.
“To be honest with you, I don‘t think we are ever going to get that money back.
“If we had signed something contractually, we might have been able to press them for that money,” he lamented.
Rochelle de Kock