Polokwane Municipality risks losing R283m to poor performance
Projects that could be affected include the loss of R20m from the Water Services Infrastructure Grant and R77,3m for Regional Bulk Infrastructure.
POLOKWANE – Polokwane Municipality may lose another R283m that was destined for infrastructure development in the 2022/23 financial year that ends on June 30.
This is in addition to the R142m that was returned to the fiscus due to National Treasury’s refusal to allow a roll-over of funds that were not spent during the previous financial year.
In a letter from National Treasury dated February 17, the municipality was informed of the department’s intention to cancel payment of grants amounting to R283m for the current financial year due to the municipality’s failure to utilise the funds within the financial year that it was destined for.
This drastic measure may be taken “if the National Treasury anticipates that a municipality shall substantially underspend on the allocation, or any programme, partially or fully funded by the allocation.”
Projects involved
The projects involved include R97m of the Integrated Urban Development Grant, R8m from the Neighbourhood Development Partnership Grant and R47m from the Public Transport Network Grant.
A blow for the provision of infrastructure, will be the loss of R23m for the Integrated National Electrification Programme, R20m from the Water Services Infrastructure Grant, R4m for Energy Efficiency and Demand Side Management and R77,3m for Regional Bulk Infrastructure.
The municipality was requested to respond within seven days, explaining why expenditure reported as at December 31, 2022 was below 40% for allocations less than R100m, and below 45% for allocations above R100m.
Treasury also requested a progress report against approved projects, a representation on the cash coverage for grants transferred, a representation on the initial cash flow projections against actual performance as well as a progress report on any approved roll-overs for 2021/22 financial year.
Treasury reconsiders
National Treasury will be prepared to reconsider the sanction if the municipality could provide commitment that the allocated funds are committed and will require a representation on all projects awarded after the second quarter of the municipal financial year as at December 31, 2022 and progress made against these projects and finally, an acceleration plan against the 2022/23 approved implementation plan.
Muni’s response
Polokwane Mayor John Mpe confirmed last week that a response has been forwarded to National Treasury and that he is confident that the department will reconsider the stopping of the funds.
“We have committed the funds and contractors have been appointed to ensure that the projects are completed by the end of June,” Mpe said and explained that the progress on the projects was delayed due to the use of outsourced project managers. We have now engaged our own project management team and the municipality can now hold our own officials accountable,” Mpe said.
DA councillor in the municipality, Tiny Chidi said that, should the municipality fail to motivate why the grant funding should be allocated, it will have a disastrous effect on many projects currently underway.
“The grants spread across various directorates in the municipality and will have far reaching consequences on all aspects of service delivery.
“The relevant directors as well as the municipal manager need to answer for the poor spending of these funds,” Chidi said and added that the DA will also submit extensive written questions in the next Municipal Public Accounts Committee (MPAC) public hearing on the capacity within the supply chain management and project management units of the municipality. “We need accountability, transparency and proper consequences,” Chidi said.
