Local governments in the Eastern Cape have returned R2.2 billion in unspent subsidies to the national coffers since 2019, while communities continue to bear the brunt of crumbling roads, water systems and electricity infrastructure.
The figures were released by the state's MEC on Thursday, in response to questions from the Democratic Alliance, in response to questions from the state's co-operative governing council, Zoril Williams. The figure does not include funds returned from the state's two metros, nor does it include unused grant money for the current fiscal year, which will only be finalized at the end of March.
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However, with only three weeks left in the financial year, local authorities have only spent between 17% and 61% of the funds, which means that local authorities' local authority grants, regional block infrastructure grants, , and current spending on electrification programs has been a disaster for the state. % of these grants.
In Nelson Mandela Bay alone, the total amount of grants at risk is R542 million as funds earmarked for critical infrastructure projects are not being spent.
“As a result of this lack of spending, hundreds of thousands of people are forced to live with sewage on the streets, no water in the taps, and no electricity in their homes. Because these people don't have the ability to spend the money.
“Critical infrastructure projects, from water surges to electrification to major infrastructure upgrades, have stalled due to mismanagement and incompetence.”
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Mr Williams' response also showed that the subsidy underspending in local authorities quadrupled between 2020 and 2021, doubled again in 2022 and is still increasing.
Between the 2019/20 and 2022/23 financial years, rural infrastructure grant allocations of R1,147 million, national integrated electrification program allocations of R176.2 million and water services infrastructure grants of R315.2 million allocation, and R553 million of the Regional Block Infrastructure Grant allocation was returned.
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In the 2019/20 financial year, the shortfall in municipal infrastructure grant spending by local authorities totaled R62.6 million. A year later, the amount had ballooned to R252.3 million, and the following year it rose to R400 million.
Williams said his department has developed a risk-adjusted strategy to “prevent permanent subsidies.” [under]Spending”.
At a Thursday meeting with the state's mayors, he said negative messages surrounding local government need to stop. He said the plan was working, citing the example of OR Tambo District Municipality, which managed to use up 60% of the subsidy.
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Mr Williams said the risk adjustment strategy was introduced in March 2023, increasing mid-year performance from 37% to 61% of grants already disbursed.
He said support is being provided to expedite the implementation of the project. DM