ANC NEWS STATEMENT ON CITY FISCAL DUMPING

The ANC takes strong exception to Mayor Patricia de Lille's statement claiming that the city has spent 92, 9% of its capital budget for the 2012/2013 financial year. This is a misrepresentation of the truth.

The city approved a budget of R6,2 billion for the financial year of 2012/2013. The city's actual spending up until the end of May was only R3, 6 billion. The city also committed R1,1 billion in unrealised projects in their budget as up to the end of May that together equals to R4,7 billion.

There is a short fall of R1,5 billion (about 25%) between the original amount budgeted of R6,2 billion and the R4,7 billion allegedly spent. Both in May when those figures were released and in July when the mayor announced the final expenditure report of the city claiming that the city had spent 92,9% of the budget, the ANC responded by calling into question the validity of the report and the figures quoted.

ANC Whip Xolani Sotashe said, "How is it possible that the city can jump from an actual spending of R3,6 billion in May, to R5,7 billion at the end of June?"

The ANC feels that this is a severe case of fiscal dumping and is exposing the DA led city administration for lying and misleading the people of Cape Town.

In the ANC's investigations we have uncovered the following discrepancies:

1. In the report that is going to transport, roads and storm water, there is an amount of R632 million claimed to be spent on the compensation and scrapping allowance, yet in the same report, the officials have said negotiations have not yet been finalised with the affected parties. In truth, the money has not been spent on scrapping or compensation at all. The executive director claimed that they had been given permission by national government to open up a separate account. The ANC would like to know has the city effectively dumped the R632 million rand into another account to get it off the city's books?

2. Also under transport, roads and storm water, there is amounts of R471 million and R50 million which officials claim to have spent on the acquisition of busses, yet the city will not take full delivery of these busses by the end of the financial year. This expenditure was dramatically done in one month, again alluding to fiscal dumping.

3. Also under transport, roads and storm water the city claims to have spent R55,7 million on feeder stations for the IRT in Adderely street , yet they are saying the project is in design phase. Again this spending was done in the same month without any evidence to show for it. There are no road works to show for this and officials have confirmed this money hasn't been spent.

4. There is also a claim that R1 million was spent on a link road (Okavango) in Brackenfell but the comments from the officials are that the project design is in progress.

5. The N2 express service to Mitchells Plain tender of R12,7 million was awarded on 24 June 2013. Within 5 days of awarding the tender, the city claims to have spent R5,4 million of the budgeted R12,7 million. This is another example of fiscal dumping as for the city to spend nearly half the budgeted allocation for a tender up front, is not normal practise.

6. Another example of fiscal dumping is that figures have been included to inflate City of Cape Town spending for the year end 2012/2013 from the next financial year. In the transport, roads and storm water budget the year end finished on 30 June 2013, yet there is expenditure until 22 July 2013, which falls into the next financial year and must not be displayed on this year's report. This is found in the report going to transport where the reporting overlaps to the next financial year and large amounts were put in that 3 week period of the new financial year in order to achieve the claimed 92,9% expenditure.

7. When we look at the commitments column in the budget, the city, which has been struggling to spend its budget over the past twelve months, wants us to believe that it has spent its committed funds totalling R1,1 billion, within one month from May 2013 to June 2013. This is unrealistic to spend such a lot in such a short time.

8. Again in transport, roads and storm water, the city claims to have spent R188,3 million on fare collection, yet the officials' comments say that "numerous claims for extensions of time and extra costs leaves this project still being evaluated."

9. In the report for utility services as on 5 August 2013, there is a figure of R558 million which was committed for the month of June 2013, but it is without explanation as to whether this committed budget has been spent or not. It is the ANC's position that utility services has therefore not spent the full R2 billion contributing to the 92'9% expenditure as claimed by the mayor... in fact only R1,47 billion is spent.

Just on transport, roads and storm water alone, if all the discrepancies are added up, the amount that the ANC have found unspent still adds up to R1,4 billion. This is without the R558 million discrepancies we found in utilities

The ANC has uncovered other discrepancies in other departments of the city and will continue to expose these to the public.

We have also observed that the city has no capacity to deal with the sanitation crisis and has no plan for the upgrading of informal settlements. Instead the city is using its money to do business with the companies providing Tethford Porta Potti's at the expense of the poor.

The ANC will be approaching the national minister of human settlements for the urban settlement development grant, making sure that strict conditions are placed on the city, so that these funds are spent in consultation with local communities.

Clearly there has been an attempt to window dress on the city budget and to claim expenditure through huge fiscal dumping.

The ANC will continue its investigations and interrogation of the budget and approach the Auditor General and Public Protector to take the matter further.

The ANC views this as a serious scandal and will pursue these matters and uncover all corruptive practices by the City of Cape Town.

Statement issued by Xolani Sotashe, ANC Chief Whip, City of Cape Town, August 7 2013

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