The Democratic Alliance (DA) is uneasy over the metro’s apparent intention to borrow R1.1-b while it has accumulated R8.3-b in cash that is lying idle in the metro’s bank accounts.
During a speech delivered at the April council meeting, DA member of the Finance Oversight Committee, Bruce Reid, said that the metro had better options for use of this unplanned cash surplus than to leave it in the bank.
He suggested that the metro could revise the tariffs and rates proposed for the next year’s budget downwards for the benefit of hard-pressed ratepayers.
Another option could be to do more repairs and maintenance and eradicate all potholes throughout the metro, as well as stopping all sewers from overflowing into the metro’s streets and streams.
“The metro used its majority in the council to approve the issuing of its sixth bond to borrow the R1.1-b to fund its capital programme for the two months remaining of the current financial year,” says Reid.
“The DA voted against issuing the bond in the current financial year.”
They do not agree that the time is right to draw more interest-bearing debt in the present circumstances.
Reid highlighted the following reasons against taking the bond in this financial year.
- At the end of March there was R8.33-b in the metro’s bank accounts earning R10-m interest per month.
- Since the beginning of July, the money owed to the metro, which it has failed to collect, has risen by R1.36-billion.
- This debt has accumulated during a period when the metro failed to fully use the budget provided to the finance department for credit control.
- Under-spending on service delivery that had been promised to ratepayers at budget time has led to the metro’s revenue exceeding its expenditure by R3-b after the first nine months of the financial year.
- Part of the excessive cash surplus held by the metro is explained by the fact that the investment in new capital development is far behind schedule.
“Ekurhuleni has also come in for criticism from Gauteng Provincial Treasury for not spending grants, failing to spend their capital budget, failing to collect debts owing to the municipality and for seeking more loans while accumulating excessive cash,” Reid adds.
The Provincial Treasury said that “taking any further loans would place stringent pressure on Ekurhuleni’s finances”.
After multiple requests for comment from the metro, the Addie has yet to receive response.
