KwaDukuza municipality’s capital budget will be cut by R59.37 million, which will have a direct impact on various projects which will be delayed or moved to the next financial year.
This was announced by acting mayor, Cllr Dolly Govender who tabled the final adjustment budget for the second half of the 2019/20 financial year during council sitting last Thursday.
Clear signs that the municipality’s finances have sharply deteriorated were cemented in November last year when the municipality came under heavy criticism for failing to spend grants exclusively apportioned by National Treasury for specific projects.
The municipality receives its major revenue from property rates and providing services such as electricity and refuse collection.
Grants and subsidies from national and provincial treasury also form its revenue stream.
The consequence of under-spending is that budgets allocated by the National Treasury will be slashed in the new financial year.
However, this is not the first time the municipality has under-spent on its capital budget.
What effect will cuts in the capital budget have on residents of the Dolphin Coast?
While the full extent of municipal under-expenditure will only be known when financial year results are made public, cuts in spending have a direct impact on service delivery.
Below-budget expenditure on capital projects for key infrastructure such as roads, sanitation and schools have serious implications on service delivery.
The principal function of local government is to deliver services such as electricity, water, roads, refuse removal and in some cases housing.
If council is left with a massive hole in lost provincial funding for capital projects, the shortfall means many projects will have to be delayed or cancelled.
The municipality will see cuts to electricity infrastructure after the department took the biggest hit.
The department’s capital was cut by R22.5 million.
Last year it was reported that of the electricity unit’s R20 million budget in 2018/19, only R3.6 million had been spent by the second quarter.
The money was meant to be spent on electricity infrastructure upgrades.
This cut means a rollover of electrification projects while the budget on slow moving projects have also been reduced and moved to the next financial year.
The Gizenga substation project has been reduced and funds have been shifted to the next financial year.
The R6 million grant by the department of energy has also been withdrawn.
Selected municipalities receive grants for the planning and implementation of energy efficient technologies ranging from traffic and street lighting to energy efficiency in buildings and water service infrastructure.
Community services and public amenities business unit will also take a big cut with a budget decrease of approximately R20 million.
This will effect various beach rehabilitation and upgrading projects which have been reduced based on cash flow projections as the municipality cuts back on programmes and implements cost-cutting measures to reach its expenditure ceiling.
With higher fuel prices, a property rates increase and a proposed 13.07 percent increase in electricity tariffs, the poor and working class communities will be the biggest victims.
The consumers’ ability to pay for their municipal services affects municipalities’ ability to meet budgeted revenue targets.
Council insiders have said lack of qualified personnel in some departments was behind the drastic under-spending.
IFP councillor Moosa Motala said under-spending on the municipal capital budget in the financial year had a direct impact on service delivery.
“This impacts negatively on the overall economic growth rate of this region and the ability to create jobs. Intervention needs to take place to ensure expenditure is beefed up. This is the only way communities will get the services they deserve,” said Motala.
Download The North Coast Courier mobile app, now available free from the Apple iStore and on Google Play, for IOS and Android phones.
