THE Democratic Alliance has slammed the city’s approval for a R1-billion loan for capital projects, citing the municipality’s current debt of R8.4-billion.
In a council meeting on Wednesday, 28 February, the full council approved the loan.
In a copy of the agenda it stated ‘the importance for the City to collect amounts owed by other government departments prior to considering borrowing was stressed.’
‘Clarity was then provided that the borrowing was in respect of capital projects with all the necessary National Treasury compliance having been met and that cognisance is taken of the intention to increase debt collection.’
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The DA PR councillor for Wards 13 and 15 and the DA eThekwini Economic Development and Planning Committee Whip, Marlaine Nair, vehemently rejected the loan request.
“Tough economic times call for some serious austerity measures to be implemented,” said Nair.
“Instead of tightening our belts, we simply want to take out a R1-billion loan?”
“With an already exorbitant 8.4-billion owing in loans by this city, taking out another loan only means that we are taking another step towards disaster, toward overburdening our eThekwini residents who will eventually have to bear the brunt of a poor decision.”
The council recommended the raising of the long-term debt which would sit at a fixed interest rate for a tenor of 15 years as approved in the medium term budget from preferred lender, Nedbank.
In her address, Nair noted that since 2011 the GDP for the eThekwini region has only grown at an annual rate of 1.7 per cent, below the five per cent growth rate required by the National Development Plan.
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She made reference to the Auditor General’s report highlighting the R904.1-million in consumer debts that were written off as irrecoverable and the R645.9-million incurred from water loss due to illegal connections and ageing infrastructure.
Deputy mayor, Fawzia Peer, said that all due diligence has been done to ensure that the City can afford it and that the loan will not affect the financial standing of the municipality.
“This loan is part of an approved budget and service delivery will not be hampered in any way. It is also important to note that it is the norm for capital projects to be supported by loans,” said Peer.
“What about revenue loss through illegal electricity connections and roads that need to be redone because of poor quality workmanship the first time around?” queried Nair.
“It’s time to go back to the basics, deal with the problems and ensure fiscal discipline and increased internal funding, without overburdening our ratepayers, who are already facing VAT and TAX increases. There must be political will and hands on leadership to ensure projects are completed on time and within budget,” she stressed.
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