EC councils in failures to spend on services

By Asanda Nini

Despite a glaring and desperate need for decent services and proper infrastructure across the province, most Eastern Cape municipalities are expected to have badly underspent their capital budgets in the financial year which ended in June.

Finance MEC Sakhumzi Somyo said under-expenditure was affecting service delivery negatively but he hinted that expenditure had improved in the last quarter.

DA MPL Bobby Stevenson called the failure to spend “horrific”.

Somyo released the third quarter information in a written reply to questions submitted to the provincial legislature by Stevenson, which Stevenson gave to the Dispatch yesterday.

In his reply, Somyo said only R4.4-billion of the total R6.6-billion allocated to municipalities for infrastructure development, had been spent by March 31.

Somyo reported: “Theoretically all municipalities (with capital expenditure or capex) below 75% [on March 31], will potentially underspend, and those above will potentially overspend.”

Somyo’s information showed that by March 31, marking the end of the third quarter of the municipal financial year, the 39 provincial municipalities only managed to spend half (50%) or R4.3-billion of their R8.7-billion total infrastructure budget.

They were supposed to have all spent about 75% or more by that time.

However, only two councils had managed to spend above the required threshold of 75% by March 31.

The rest showed poor signs of spending, raising fears that they would seriously underspend by the end of the financial year.

The consequence of underspending is that budgets allocated by the National Treasury will be slashed in the new financial year.

One of the worst culprits was troubled Mnquma municipality which had managed to spend only 4% or R2.7-million of their R72-million total capex budget by March 31.

In the past few months the Butterworth-based municipality, with its ailing infrastructure, has seen service delivery coming to a screeching halt.

The municipality was wracked by political and administration infighting for most of the 2016-17 financial year.

Some of the embarrassingly poor capex performers by March 31 included;

  • Sakhisizwe municipality which only spent 9% of its capex budget;
  • Dr Beyers Naude municipality which only spent 12%;
  • Amathole district municipality spent 18%;
  • Makana municipality 26%;
  • Intsika Yethu 28%; and
  • Kouga 30%.

According to Somyo’s report, only Sarah Baartman district municipality was ahead, managing to spend 88%, or R3.4-million of their R3.9-million infrastructure budget by March.

The district was followed closely by Chris Hani and Mhlontlo municipalities who spent 77% and 74% of their budgets respectively.

The province’s only two metropolitan municipalities, Buffalo City Metro (BCM) and Nelson Mandela Bay Metro (NMBM), had at the time spent 42% and 51% of their budgets respectively.

At the time BCM had spent R711-million of their R1.6-billion infrastructure budget, while NMBM had spent R787-million of their R1.5-billion budget.

The full extent of province-wide municipal underexpenditure will only be known when financial year results are made public.

Speaking to the Dispatch yesterday, Somyo said he expected the latest reports would show a drastic improvement in spending between April and June, and that some municipalities managed to spend their entire allocations.

He said one of the reasons for the drastic underspending by end of March, was because some invoices were not yet settled by the municipalities

Somyo said he had presented a draft report on the latest spending trends during a meeting with Premier Phumulo Masualle on Friday.

The figures were not final and the latest figures would be confirmed in the annual financial reports to be tabled by all municipalities at the end of this month.

Somyo said poor spending by municipalities was impacting negatively on service delivery.

Somyo said his department would meet with the National Treasury and other government officials in October to adjudicate on whether municipalities who failed to adequately spend their allocations, would be granted rollovers or not.

Stevenson yesterday said infrastructure spending was “a key component” of creating economic growth in the province.

“The horrific capital under-expenditure in some municipalities as the end of the third quarter clearly illustrates a massive lack of capacity.

“This impacts negatively on the overall economic growth rate of this province 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,” Stevenson said.

The legislature’s cooperative governance and traditional affairs portfolio committee chair and ANC MPL, Mninawa Nyusile, yesterday said lack of qualified personnel in some municipalities, was behind underspending in those councils.

-DispatchLIVE

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