Tshwane council finances ‘getting back on track’

When the new DA-led multiparty council took over in August last year, mayor Solly Msimanga’s administration inherited a R2 billion budget deficit.

Tshwane Mayor Solly Msimanga outside the city hall. Picture: Jacques Nelles

Tshwane is coming out of a financial slump and is almost in line with its projected budget for the first financial quarter, with only a 1% shortfall.

Revenue for the first quarter, between July and September, amounted to R8 billion – R89.5 million down from the budgeted R8.1 billion, Tshwane member of mayoral committee for finance Mare-Lise Fourie said yesterday.

Water and sanitation revenue was down R135 million and R19 million respectively, due to a decline in resident usage.

But there was a large underspending of R6.3 billion, compared with the projected expenditure of R9.3 billion – a variance of 32%, with the city underspending R3 billion.

This was due to bulk purchases of water and electricity from Rand Water and Eskom respectively that resulted in a loss of R1 billion a month.

“The account for bulk purchases from Eskom and Rand Water is only received in the next month. We are currently one month behind,” she said.

“This is a big amount and it throws our budget out.”

When the new DA-led multiparty council took over in August last year, mayor Solly Msimanga’s administration inherited a R2 billion budget deficit, of which R1.5 billion was due to irregular expenditure.

The biggest contributor to these irregularities was a tender for the supply of smart prepaid electricity by company PEU Capital Partners. But the High Court in Pretoria ruled last month that the contract, signed by the former ANC administration, was “constitutionally invalid”. This saved the city an amount of R950 million.