Funds to be redirected from stalled projects to make up for grant cuts
With the loss of R171m in grant funding, the Nelson Mandela Bay municipality wants to redirect funds from stalled projects to make up for the budget cuts from the National Treasury.
The changes will form part of the 2023/2024 budget, with the financial year due to end on June 30.
On February 12, the National Treasury sent a letter to city manager Noxolo Nqwazi, notifying her of its decision to withdraw a portion of grant funds allocated to the city because of underspending.
At a mayoral committee meeting yesterday, mayor Gary van Niekerk said he had no idea why the funds had been cut.
“Though we have not seen the actual reasons for the budget cuts, Buffalo City has been affected the most when they have done well with spending.
“To improve spending, we have decided to work on our [human settlements] business plan because we want to ensure that by July 1 our plan has been approved so we can start spending our budget immediately.”
Deputy director for monitoring and evaluation William Obeng presented a budget adthe justment report revealing a reduction of R130m in the city’s capital budget and R41.8m in its operational budget.
Funds reduced from the capital budget will come from:
● Roads and stormwater — R13.6m;
● Sanitation services — R20.6m;
● Water services — R3.1m;
● Human settlements — R12.5m;
● Public health — R781,625;
● Economic development — R3.7m;
● Sports, recreation, arts and culture — R2.2m;
● Electricity — R13.2m; and
● Integrated Public Transport System (IPTS) — R56.4m.
The operational budget cuts will come from water and sanitation (R1.3m), human settlements (R1m) and IPTS (R39.5m).
Some of the projects highlighted for reduced funding include tarring of gravel roads, sanitation upgrades and rehabilitation, upgrading of open spaces, provision and installation of ablution facilities, installation of an electricity transformer and refurbishment of IPTS buses.
Before Obeng gave his presentation, acting city manager Luvuyo Magalela said the municipality would find savings from stalled projects to ensure service delivery was not affected.
“In this report, we listed sev
eral projects that will be cut from the different directorates for the funding sources,” he said.
“We identified projects critical to service delivery with roads and transport, water services and electricity and energy.
“We will look at internal funding and identify projects that are not moving.
“We will find savings and redirect the funds to those projects to ensure service delivery continues for those three departments.”
Magalela said a budget amendment report, originally intended for discussion at the meeting but not yet ready, would be tabled at the next mayoral committee.
This would include proposed changes to supplement the projects affected by the adjustments.
Budget and treasury political head Buyelwa Mafaya said the municipality was not the only one that had its funding reduced.
“While we are concerned about this issue, we are motivated to spend wisely and see how best we can encourage the different directorates to spend.
“We also need to revive our budget monitoring war room which will track how far we are in spending.”
Public health political head Thsonono Buyeye said the directorate was happy to have some of its funds redirected.
“Last year, we indicated that we wouldn’t be able to spend our allocated budget to purchase skip bins because they go hand in hand with a refuse truck that will service them.
“Therefore, without any trucks in place there is no point in purchasing the bins.”
On the funds reduced for the IPTS, Buyeye said the amount reflected a collapse of the project.