The Citizen (Gauteng)

Council finances ‘getting back on track’

- Rorisang Kgosana

Tshwane is coming out of a financial slump and is almost in line with its projected budget for the first financial quarter, with only a 1% shortfall.

Revenue for the first quarter, between July and September, amounted to R8 billion – R89.5 million down from the budgeted R8.1 billion, Tshwane member of mayoral committee for finance Mare-Lise Fourie said yesterday.

Water and sanitation revenue was down R135 million and R19 million respective­ly, due to a decline in resident usage.

But there was a large underspend­ing of R6.3 billion, compared with the projected expenditur­e of R9.3 billion – a variance of 32%, with the city underspend­ing R3 billion.

This was due to bulk purchases of water and electricit­y from Rand Water and Eskom respective­ly that resulted in a loss of R1 billion a month.

“The account for bulk purchases from Eskom and Rand Water is only received in the next month. We are currently one month behind,” she said.

“This is a big amount and it throws our budget out.”

When the new DA-led multiparty council took over in August last year, mayor Solly Msimanga’s administra­tion inherited a R2 billion budget deficit, of which R1.5 billion was due to irregular expenditur­e.

The biggest contributo­r to these irregulari­ties was a tender for the supply of smart prepaid electricit­y by company PEU Capital Partners.

But the High Court in Pretoria ruled last month that the contract, signed by the former ANC administra­tion, was “constituti­onally invalid”.

This saved the city an amount of R950 million.

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