INFRASTRUCTURE development in the City of uMhlathuze is set to accelerate this year with the securing of a R100-million loan towards major capital projects.
On Tuesday, Nedbank confirmed it had been appointed as the sole funder for the City, adding that the Industrial Development Zone had the potential for investment worth R4,5-billion in the future.
Despite the municipality’s under-spending woes, Chief Financial Officer Mxolisi Kunene said the loan had been approved by Council and included within the budget in May.
‘The funds will be used towards a number of major infrastructure related projects.
‘However, the cash will only be drawn as and when needed for the projects.
‘I am aware of the past spending patterns but there has been good improvement in terms of spending.
‘When Council approved the loan, it was decided the money will only be taken when infrastructure starts, said Kunene.
Questions
However, opposition parties have questioned the timing of the activation of the loan, which was first approved in the 2011/2012 financial year.
‘How can we take the loan in light of the roll-overs of Municipal Infrastructure Grant (MIG) funding and capital expenditure?
‘We will definitely lose some of the MIG funding,’ said Cllr Louis Fourie.
‘I cannot see the reasoning for activating the loan now and question whether this is related to the upcoming local government elections in less than a year’s time,’ Fourie said.
Cllr Dumisani Nxumalo said it was ‘unfortunate’ that the City had to contend with financial roll-overs.
‘A lot of money has not been spent. What is pushing us to take this loan now?’
Condition
Meanwhile, City Mayor Elphas Mbatha said the loan had been approved in principal with the condition that only when a certain percentage had been spent, the loan amount could be utilised.
‘The loan was approved as part of the capital budget. We need to spend a certain level before we tap into the loan,’ said Mbatha.
Divisional Executive at Nedbank Corporate Banking, Remo Moyo, said the capital expenditure would be used to help develop the port city into a thriving industrial, commercial and administrative centre.
‘We welcome the opportunity to play a part in developing a city that has great potential to contribute to both the KZN and national economy.
‘The municipality is also on a strong drive to address its socio-economic challenges by introducing programmes that focus on improving its citizens’ lifestyles,’ Moyo said.
More on uMhlathuze spending HERE
