N2 Gateway project hit by Cape Town spending cut

Posted On Thursday, 08 December 2005 02:00 Published by eProp Commercial Property News
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N2 Gateway project hit by Cape Town spending cut  
Chris van Gas

Nomaindia MfeketoCape Town — The Cape Town city council has cut its spending plans for the next three years, saying planned allocations from provincial and national government did not materialise.

A 33% reduction in the city’s capital spending, from R4,5bn to R3bn, meant the city would build fewer houses as part of its N2 Gateway project and would cut its traffic and roads budget.

The failure to collect outstanding water bills would also see the water budget being cut in the medium-term budget plan, the city’s mayor, Nomaindia Mfeketo, said yesterday.

She said that while there had been cuts, these would not affect service delivery as there were still sizeable amounts left in the capital budget to spend on upgrading infrastructure.

“Adjustments in most cases are downwards as a result of considering budget alternatives and having doubts about receiving certain allocations that were to be given in this financial year.”

With voters going to the polls on March 1 to elect a city administration, any cut in spending is a setback for the African National Congress (ANC)-led council.

The council did not say what the overall effect of the budget cut would be on the N2 Gateway project near Cape Town International Airport, initially projected to build 22000 houses.

The council did say, however, that instead of 6600 units over the next 18 months, the number will be reduced to 2200 units.

The traffic and roads budget was reduced by R155m (17,7%). The water services budget was cut by R120m (20%).

The budget for electrical services was also reduced.

Democratic Alliance (DA) spokesman Pat Hill said the council had transferred R900m from the capital budget to the operational budget and this was the cause of the cutbacks.

Less capital spending would hold back service delivery, he said, and the council had not supplied a corresponding operational budget to indicate how the money would be spent.

He said the DA and public could not support the council if it “hides facts” from scrutiny.

The DA said it was in possession of a document from a closed-door meeting between officials and contractors showing there were financial problems.

The contractors, who had completed 200 flats for the Gateway project, were told that they could expect payment from the council only in April, the DA said.

The opposition party also complained that details of the project’s financing had been kept secret.

Mfeketo denied the accusations of short-term financing problems or cash flow problems affecting the N2 Gateway project.

If the promised allocations from provincial and national government were paid, the city would spend more, Mfeketo said.

“In the event that those allocations are made in this financial period, we will again adjust our budgets accordingly in those categories.”

Mfeketo said the ANC-controlled council was damned if it did not tell the truth, and damned if it did.

Last modified on Thursday, 15 May 2014 14:48

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