Al­lo­ca­tions for poor-per­form­ing mu­nic­i­pal­i­ties slashed

The Star Early Edition - - FRONT PAGE - LOYISO SIDIMBA [email protected]

MU­NIC­I­PAL­I­TIES across the coun­try – in­clud­ing three which in­vested in the doomed VBS Mu­tual Bank – will lose their share of nearly R3.7 bil­lion to im­prove in­fras­truc­ture af­ter the Na­tional Trea­sury found they had no ca­pac­ity to spend it.

Fi­nance Min­is­ter Tito Mboweni has stopped the trans­fer of al­lo­ca­tions of bil­lions of rand to poorly per­form­ing mu­nic­i­pal­i­ties that are un­der­spend­ing in the Eastern, North­ern Cape, Free State and North West.

The bil­lions were al­lo­cated as part of the mu­nic­i­pal in­fras­truc­ture grant, which aims to erad­i­cate in­fras­truc­ture back­logs in poor com­mu­ni­ties to en­sure the pro­vi­sion of ba­sic ser­vices such as wa­ter, san­i­ta­tion, roads and com­mu­nity light­ing.

Ac­cord­ing to Mboweni’s no­tice is­sued last Wed­nes­day, the de­ci­sion was taken af­ter con­sul­ta­tion with the De­part­ment of Co-op­er­a­tive Gov­er­nance and Tra­di­tional Af­fairs (Cogta).

“Na­tional Trea­sury, in con­sul­ta­tion with Cogta, con­cluded that mu­nic­i­pal­i­ties re­flect­ing sig­nif­i­cant un­com­mit­ted un­der­spend­ing would have their funds stopped within four prov­inces,” said the no­tice.

Mboweni said the money would be re-al­lo­cated to the dis­trict mu­nic­i­pal­i­ties of the 94 lo­cal mu­nic­i­pal­i­ties.

The af­fected lo­cal mu­nic­i­pal­i­ties in­clude 32 in the Eastern Cape and an­other 26 in the North­ern Cape, while North West and the Free State both have 18. The list in­cludes Madibeng, which in­vested R31 mil­lion of its con­di­tional grants with VBS Bank.

In to­tal, Mahikeng de­posited R83m in VBS, in­clud­ing R23m from its mu­nic­i­pal in­fras­truc­ture grant, R60m of its eq­ui­table share.

The Moretele lo­cal mu­nic­i­pal­ity in­vested R50m from its wa­ter ser­vices in­fras­truc­ture grant.

The Dr Ruth Se­go­motsi Mom­pati dis­trict mu­nic­i­pal­ity in­vested R150m, of which R100m was from its re­gional in­fras­truc­ture grant and R25m each from the eq­ui­table share for free ba­sic ser­vices and its build­ing fund.

The il­le­gal VBS de­posits made by the mu­nic­i­pal­i­ties cost four may­ors their jobs this week af­ter they were re­called by the ANC in North West.

In terms of Mboweni’s no­tice, the Dr Ruth Se­go­motsi Mom­pati dis­trict mu­nic­i­pal­ity will dou­ble its mu­nic­i­pal in­fras­truc­ture grant al­lo­ca­tion from over R135.3m to al­most R271m af­ter the stop­ping of al­lo­ca­tions to five lo­cal mu­nic­i­pal­i­ties within its bor­ders.

As well as stop­ping the R3.68bn, Mboweni has also halted R27.4m ini­tially al­lo­cated to the Msun­duzi lo­cal mu­nic­i­pal­ity in Pi­eter­mar­itzburg and redi­rected it to the trou­bled West Rand dis­trict mu­nic­i­pal­ity, which will re­ceive R20m, while the Mat­losana lo­cal mu­nic­i­pal­ity will get R7.4m. West Rand was placed un­der ad­min­is­tra­tion last month af­ter work­ers went on an in­def­i­nite strike over the mu­nic­i­pal­ity’s fail­ure to make third party pay­ments such as med­i­cal aid, pen­sion funds, the Unem­ploy­ment In­sur­ance Fund and fu­neral poli­cies. It also de­posited over R77m with VBS.

The money for­feited by Msun­duzi was meant to fund neigh­bour­hood devel­op­ment projects to im­prove the qual­ity of life of res­i­dents in the tar­geted ar­eas, es­pe­cially town­ships, af­ter the mu­nic­i­pal­ity ad­mit­ted it ex­pected un­der­spend­ing due to chal­lenges it was ex­pe­ri­enc­ing in im­ple­ment­ing projects.

Mboweni has un­der­taken that the mu­nic­i­pal­i­ties whose al­lo­ca­tions have been stopped will con­tinue re­ceiv­ing sup­port from the Trea­sury, Cogta and rel­e­vant stake­hold­ers on the mu­nic­i­pal in­fras­truc­ture grant cost re­im­burse­ment and in­voice ver­i­fi­ca­tion.

The SA Mu­nic­i­pal Work­ers’ Union in North West told In­de­pen­dent Me­dia that most of the prov­ince’s mu­nic­i­pal­i­ties were un­able to keep up with third party pay­ments for their em­ploy­ees. Provin­cial sec­re­tary Vin­cent Diphoko said many of the mu­nic­i­pal­i­ties were be­hind by up to eight months.

He said the ANC’s de­ci­sion to axe seven may­ors this week was not enough as may­ors and mu­nic­i­pal man­agers,who are ac­count­ing of­fi­cers, were equally re­spon­si­ble.

He added the ANC should act on poorly run mu­nic­i­pal­i­ties whether or not there are elec­tions next year.

Fi­nance Min­is­ter Tito Mboweni

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