The ANC says the City of Cape Town is lying to residents about its record capital expenditure for the previous financial year.
|||Cape Town - The ANC has accused the City of Cape Town of “fiscal dumping” so that it could “lie” to residents about its record capital expenditure for the previous financial year.
Mayor Patricia de Lille announced this month that the city had spent R5.7 billion - or 92.9 percent - of its capital budget, its largest budget to date.
But the ANC said the mayor’s statement was premature and based on untruths. Chief whip Xolani Sotashe said more than R1bn could not be accounted for if all the discrepancies in the 2012/2013 budget were added up.
“We (as the ANC) have a responsibility to play a political oversight role, to inform the public about how the city is functioning.”
He said the ANC had raised the alarm in May when it became apparent that the city would not meet its expenditure targets by the end of the financial year.
The ANC again challenged the city’s budget when De Lille held a media briefing to highlight the city’s record spending two weeks ago.
Speaker Dirk Smit took umbrage over the ANC’s comments to the media, and he ordered Sotashe and councillor Tony Ehrenreich to provide evidence of their allegations within several days, or face disciplinary action.
In his letter, submitted to the Speaker on Wednesday, Sotashe said the ANC was forced to respond to the city’s expenditure claims in the media as the information was released during a media briefing by the mayor.
Sotashe said the city approved a budget of R6.2bn for the financial year of 2012/2013. The city’s actual spending until the end of May was only R3.6bn. The city also committed R1.1bn in unrealised projects in its budget as up to the end of May that together equalled R4.7bn.
This meant there was a shortfall of R1.5bn between the original amount budgeted of R6.2bn and the R4.7bn allegedly spent.
“How is it possible that the city can jump from an actual spending of R3.6bn in May, to R5.7 bn at the end of June?”
He said De Lille had trumpeted the city’s success without having all of the facts.
“We’ve warned the mayor to get rid of deputy mayor Ian Neilson (who is also the mayoral committee member for finance).”
But Neilson said the ANC’s allegations proved “yet again” that the party did not understand how the city’s finances worked. “They have misread contracts, conflated separate items, and misunderstood the phasing of projects.”
Sotashe said the biggest offender was the transport, roads and stormwater directorate, which had underspent by R1.4bn. He said that according to a report being presented to the portfolio committee on Thursday, R632 million was spent on a compensation and scrapping allowance.
But, in the same report, officials said negotiations for the allowance had not been finalised. “The ANC would like to know whether the city has effectively dumped the R632m into another account to get it off the city’s books?”
But Neilson said the negotiations were concluded in early June, and the negotiations alluded to in the report related to 12-year operating agreements.
The ANC also asked how the city could award a R12.7m tender for the N2 Express Service on June 24, and then claim to have spent R5.4m of the funds five days later.
Neilson said: “This is incorrect. The ANC has conflated separate things. The R5.4m spent on N2 Express is expenditure incurred during the year on the major bus station at the Civic Centre required for the N2 Express service buses to dock at in town.”
These stations are already complete and were funded by a previous contract.
Cape Argus