The beleaguered N2 Gateway project has led to the City of Cape Town emerging as the worst financial performer of the country's nine main metro municipalities during 2006.
This is according to a new report released on Tuesday by the South African Cities Network (SACN) entitled the State of the City's Finances Report 2007.
It also revealed that with the country's nine largest municipalities in a better financial position now than they have been over the last decade, they are still spending far less of their capital budgets than they claim to be.
It said because municipalities adjust their budgets during the financial year, they appear to be spending more than they actually initially set out to.
Only 37 percent of the City of Cape Town's capital budget as drawn up at the beginning of the 2005/06 financial year, was actually spent in the way it said it would, compared to 71 percent it claimed to have spent at the end of the financial year in June 2006.
At the beginning of that financial year, the City of Cape Town's budget indicated that it would register capital expenditure of R4-billion, but only managed R1,5-billion.
In 2006, Housing Minister Lindiwe Sisulu blamed the new DA administration for stalling the project even further when it questioned the payments to contractors and the City of Cape Town was removed from the project.
According to the report the Msunduzi Municipality performed the best during 2006 - overspending on its budget, with actual spending registering 127 percent, followed by Johannesburg with 98 percent and Mangaung at 91 percent and Nelson Mandela Bay at 81 percent.
The authors attribute the low budget spending of several municipalities to a lack of capacity to spend, poor planning and the unreliability of the grant system, especially in respect of low cost housing.
The report notes that because the budget adjustment process takes place after the legislated budget mid-year review process, the cities, particularly those recording significant underspending, later adjust their budgets to more realistically reflecting actual capital expenditure.
The City of Cape Town is nevertheless praised for controlling its personnel expenditure, increasing its revenue and capital expenditure since 2002/03.
The study considered the financial statements of the 2003/04 and 2004/05 financial years and the overall financial performance of the nine biggest cities since 2002. - Cape Argus
This is according to a new report released on Tuesday by the South African Cities Network (SACN) entitled the State of the City's Finances Report 2007.
It also revealed that with the country's nine largest municipalities in a better financial position now than they have been over the last decade, they are still spending far less of their capital budgets than they claim to be.
It said because municipalities adjust their budgets during the financial year, they appear to be spending more than they actually initially set out to.
Only 37 percent of the City of Cape Town's capital budget as drawn up at the beginning of the 2005/06 financial year, was actually spent in the way it said it would, compared to 71 percent it claimed to have spent at the end of the financial year in June 2006.
At the beginning of that financial year, the City of Cape Town's budget indicated that it would register capital expenditure of R4-billion, but only managed R1,5-billion.
This situation is largely attributed to the N2 Gateway project which was beset by delays, slow delivery and poor workmanship, which prevented the intended expenditure on the project.
The N2 Gateway project was launched as a national pilot housing project, aiming to build 22,000 houses. But by the end of the 2005/06 financial year the City of Cape Town had built less than 800 homes.
In 2006, Housing Minister Lindiwe Sisulu blamed the new DA administration for stalling the project even further when it questioned the payments to contractors and the City of Cape Town was removed from the project.
According to the report the Msunduzi Municipality performed the best during 2006 - overspending on its budget, with actual spending registering 127 percent, followed by Johannesburg with 98 percent and Mangaung at 91 percent and Nelson Mandela Bay at 81 percent.
The authors attribute the low budget spending of several municipalities to a lack of capacity to spend, poor planning and the unreliability of the grant system, especially in respect of low cost housing.
The report notes that because the budget adjustment process takes place after the legislated budget mid-year review process, the cities, particularly those recording significant underspending, later adjust their budgets to more realistically reflecting actual capital expenditure.
The City of Cape Town is nevertheless praised for controlling its personnel expenditure, increasing its revenue and capital expenditure since 2002/03.
The study considered the financial statements of the 2003/04 and 2004/05 financial years and the overall financial performance of the nine biggest cities since 2002. - Cape Argus
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