Tshwane billion and half for housing and related amenities for residents
Metro says a R1.5-billion loan would be used for areas such as housing, health services, roads and transport and economic development among other services.
A R1.5-billion loan secured by the Tshwane municipality this week would not be used to pay workers who recently went on strike, the metro announced.
Instead, the loan by the Development Bank of South Africa (DBSA) will be used for areas such as housing, health services, roads and transport and economic development among other services.
According to metro spokesperson Lindela Mashigo, they opted to take out the loan due to the terms of the medium-term revenue and expenditure framework of the 2019/20 financial year.
“The metro approved a capital investment budget of R3.787-billion, which was to be partially funded through the raising of long-term borrowings of R1.5-billion.
“These borrowings were sourced through a competitive bidding process. Southern Africa’s largest infrastructure development finance institution, the DBSA, was the successful bidder,” said Mashigo.
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He said the metro was responsible for infrastructure development in its municipal jurisdictional area and, most importantly, to provide housing and related amenities for residents.
The long-term borrowings would see the following departments receive:
– Community services, economic development and health (R128-million)
– Human settlements and agriculture (R399-million)
– Audit, financial, legal services & communication (37-million)
– Property management and shared services (R138-million)
– Roads and transport (R370-million)
– Water and energy services (R408-million)
– Regions (R20-million)
Mashigo said that housing, roads infrastructure, energy and water services, took up more than 78% of the raised capital.
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He said the loan was not taken due to the metro’s current financial state, as the metro’s revenue has been declining – a problem that was compounded by under-collection due to Covid-19.
The metro’s actual average collection for April 2020 to June 2020 was 68%, which equals a loss of income for the three months of more than R2.8-billion.
The metro’s projections show that if nothing changes, it is likely to have a shortfall of R5-billion by the end of the 2020/21 financial year.
The metro said the loan would be paid back by 2040.
This comes as the DBSA has announced it would help finance the Tshwane and Johannesburg metros to the tune of an R4.5-billion loan.
Johannesburg metro received a portion of R3-billion.
The DBSA said these development loans were part of their support to metros “with a track record of good corporate governance and financial management as reflected in both their internal credit rating, audit outcomes and repayment profiles”.
“The funding is targeted towards rolling out large-scale infrastructure programmes to accelerate service delivery to communities by addressing backlogs, particularly in townships, rehabilitate infrastructure and invest in growth-supporting- and revenue-generating infrastructure,” said DBSA metro head Tshepo Ntsimane.
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