Metro forced to dip into reserves due to overspending on budgets
UNFORESEEN expenses incurred by the Nelson Mandela Bay Municipality in the current financial year have put so much pressure on the city’s budget that it was forced to tap into its cash reserves to keep afloat.
The biggest culprits are the city’s electricity, public transport and sports and recreation departments, which all overspent their budgets running into hundreds of millions of rands.
Not only has the electricity department’s promise that it would save the metro R50-million in electricity losses failed to materialise as yet, but the municipality has, in fact, spent R67.7-million more to buy electricity from Eskom. This despite the fact that its electricity sales had decreased by R55-million.
This means that there has either been a spike in illegal connections, or more households have been added to the metro’s indigent list and are benefiting from free electricity from the city.
At a previous joint mayoral and budget and treasury meeting, the municipality’s director of budget and financial accounting, Selwyn Thys, warned that if the trend continued into the next financial year, it would be difficult for the municipality to cover its costs with the money expected from its proposed tariff increase of 12.2%, starting on July 1.
Amat Security and Cleaning Service, the company awarded the contract to clamp down on electricity losses in the Bay, is waiting for the outcome of the independent assessors – Fort Hare University – before pronouncing on the success of its project thus far.
Amat director Nceba Faku said the assessor’s report would be revealed on April 7: “They independently evaluate or assess how we have done. However, we’re confident that the assessment will be positive.”