Metro finances greatly improve
● Efforts of DA-led coalition government in the Bay
Two years ago the Nelson Mandela Bay Municipality was heading towards financial disaster.
The assessment from National Treasury was dire: “Take the difficult decisions immediately or face impending bankruptcy within three financial years”.
What followed was a series of painful budget cuts, very strict credit control measures and the implementation of several operational efficiency strategies to turn our finances around.
These measures, as painful as they may have been, worked and in less than 24 months the city has seen a remarkable improvement in its finances.
All of the financial indicators, including the current ratio, liquidity ratio, cost coverage ratio and the collection rate are finally moving in the right direction.
As a result of the improvement in the financial performance and sustainability, the metro has received an upgrade in its credit rating to Aaa.za, which, we are proud to say, now puts its creditworthiness on a par with the likes of the City of Cape Town.
The much improved financial situation of the metro gave mayor Athol Trollip scope to put together a progressive, pro-poor budget which sees increased spending in just about all directorates, while still being able to keep the deficit to just R11.7m.
Herewith are some significant achievements from the 2018-19 budget for Nelson Mandela Bay:
1. The lowest basket of tariff increases in nearly 20 years;
2. The lowest basket of tariff increases of all metropolitan cities for the 2018-2019 year;
3. The operating budget of R10.3bn and the capital budget of R1.74bn constitutes the largest budget ever adopted for Nelson Mandela Bay;
4. An amount of R2.2bn towards Assistance of the Poor over the mid-term revenue expenditure framework (MTREF);
5. A 14% reduction on the rating factor on vacant land;
6. An amount of R45m set aside for the acquisition of land for housing development;
7. Construction of major roads includes: John Tallant Link Road, Stanford Road Extension, Bloemendal Arterial, Tyinira Street, Circular Drive and Restitution Avenue;
8. The construction of three multipurpose centres in KwaNobuhle, Arcadia and New Brighton;
9. Capital and operational funding for a new, fully functional traffic licensing centre in Motherwell;
10. Planning and construction of a high voltage electricity transmission line into the city centre, to provide a second hub which will reinforce and ensure security of supply;
11. An amount of R300m to be spent on the tarring of gravel roads over the MTREF;
12. Substantial upgrades to both the Fishwater Flats and the KwaNobuhle Waste Water Treatment Works;
13. Capital and operational funding for a new, fully functional customer care centre in Motherwell;
14. Substantially increased capital budgets for historically neglected areas such as the Uitenhage–KwaNobuhle node, the northern areas as well as the peri-urban areas;
15. R1bn to be spent on water infrastructure upgrades over the MTREF period.
Giving credence to Trollip’s infrastructure-led growth agenda, a number of significantly big infrastructure projects will commence during the new financial year.
In addition, increased spending on maintenance, especially preventative maintenance, will also see our existing capital assets receiving much-needed attention.
While we still have a huge infrastructure backlog, which is likely to remain for many years to come, it is amazing what can be achieved by applying just a little financial prudence.
If this is what the city administration can achieve in its first 23 months of coalition governance, imagine where this city will be after this government has been in office for a full term.
Retief Odendaal, member of the mayoral committee for budget
and treasury Nelson Mandela Bay