Rapid Transport System could bankrupt Ekurhuleni Metro
The DA in Ekurhuleni expressed concerns over what they say is a poor financial planning process that was used to put together the Integrated Rapid Transport Network (IRTN) and Bus Rapid Transport Project (BRT) for the metro.
In a statement issued on May 13, Edenvale councillor, Clr Bill Rundle who is the DA Shadow MMC for Roads and Transport, said the reasons for the project in terms of socio-economic development for the region are important, as it will provide safe, affordable and manageable public transport to the community. He said it is an an initiative worthy of support by everyone.
“The DA however, has rejected the business plan,” he said.
The party caucus in Ekurhuleni opposed the approval of the IRPTN and BRT Business Plan presented to council on April 30. The item was approved.
“Residents will have to make good on operating cost shortfalls, which could be anything between R150-million to R190-million per annum for the next 12 years.
“It is the intention of the metro to recover some of the shortfall from the residents, through increased property taxes said to be increased annually by 1,8 percent over and above the standard increase. This could mean that the increase in the rates can escalate to as much as 10 percent per annum for a 12 year period,” said Clr Rundle.
“Just two weeks ago, the chairman of the Property Owners Association of South Africa stated in an address to the association’s members that property owners are no longer able to absorb the incessant and continued demands being made on owners by way of annual rates increases on the properties they own. The business, revenue, jobs and taxes generated from this sector, a multi-billion Rand industry of the economy, appears to be heading downhill quickly,” said Clr Rundle.
He said there are no clear sources, time frames, undertakings and avenues that have been identified by the metro to support this project financially.
Clr Rundle said, “The Department of Transport has made it clear that there will be grant funding up to 70 percent for the first two years, 50 percent grant funding for the balance of the project term and it would not provide further assistance other than what has been indicated. The metro has not been able to explain where it will get the R 465-million CAPEX and R 190-million OPEX shortfalls as mentioned previously.”
The NEWS sent an inquiry on May 14 at 9am regarding Clr Rundle’s concerns to the Ekurhuleni Metropolitan Municipality.
The NEWS requested comment by that afternoon. At the of publishing, no comment had been received.
