KwaDukuza municipality remains stable but under financial pressure, with under-spending and rising losses highlighted in the latest budget report.

Mayor Siduduzo Gumede presented the third quarter budget and performance report to council on April 30, revealing that by March 31 the municipality had collected R2.19-billion against a R2.24-billion target, a 2% shortfall.

Expenditure reached R2.17-billion, with under-spending of 7.5% largely due to delays in project implementation and procurement. Only R125-million of the R272-million capital budget had been spent, raising concerns about potential loss of grant funding.

He noted improvements in billing through prepaid electricity rollout and a meter amnesty programme and highlighted economic growth in the area linked to the R2.2-billion Club Med development, which has created hundreds of jobs.

Expenditure reached R2.17-billion, with under-spending of 7.5% largely due to delays in project implementation and procurement. Only R125-million of the R272-million capital budget had been spent, raising concerns about potential loss of grant funding.

Electricity losses remain a major threat, totalling R344.4-million, or 26.85% of purchases.

“This loss rate is more than double the accepted industry norm and poses a direct threat to the financial sustainability of this institution, eroding our revenue efforts,” he said.

He noted improvements in billing through prepaid electricity rollout and a meter amnesty programme and highlighted economic growth in the area linked to the R2.2-billion Club Med development, which has created hundreds of jobs.

Opposition councillors raised further concerns about oversight and delivery.

Democratic Alliance caucus leader Privi Makhan criticised a lack of transparency around the Dukuza Substation, saying the steering committee has not met since June last year. Her comments followed the mayor’s confirmation that two major electrical infrastructure projects remain unfunded.

“No loan has been secured for the new Dukuza Substation, despite a R102-million loan commitment having been planned in the 2023/24 MTREF,” said Gumede.

“Separately, the SAPPI Substation grant from the Department of Trade and Industry requires a fresh application following the cancellation of the original memorandum of agreement. Both projects carry material risk to our medium-term electrical infrastructure programme.”

ActionSA caucus leader Nel Sewraj flagged under-expenditure, municipal debt and delays in project implementation, stressing the need for service delivery infrastructure to be fast-tracked.