Makana councillors who attended a special council meeting recently approved the Development Bank of Southern Africa as the service provider for an unsecured loan of R50-million proposed for water, sewage and roads in the municipality.
Makana councillors who attended a special council meeting recently approved the Development Bank of Southern Africa as the service provider for an unsecured loan of R50-million proposed for water, sewage and roads in the municipality.
Before the approval by Council to raise a loan, ratepayers were given an opportunity to comment. The Grahamstown Residents’ Association were in support of the loan but other ratepayers were concerned of the impact the loan would have on municipal rates, the ability for the municipality to manage the funds with its record of poor financial management and whether the municipality has considered recovering debt which is still outstanding in order to reduce the loan amount.
Makana Chief Financial Officer Jackson Ngcelwane responded that there will be an impact on rates and tariffs once the municipality starts withdrawing from the loan, and such information will be publicised.
He said that the Auditor-General will conduct the audit on the finances of the municipality on a continuous basis and the audit will obviously include the loan transaction.
He said that the municipality is trying their best to recover debt and are in the process of re-enforcing credit control procedures.
“The infrastructural problems that are facing the municipality are unfortunately beyond our capacity financially and even the R50-million loan will not be able to cover everything.
The infrastructure is aging while the town is growing on the other side and that puts pressure on the dilapidated infrastructure,” said Ngcelwane.
The loan is proposed to be used for road extensions and improvements in Grahamstown, Riebeeck East and Alicedale amounting to about R20-million and water service projects at the estimated cost of about R16.8-million.
These include the building of a second reservoir in Botha’s Hill; the installation of isolating valves and bulk water meters in Grahamstown East and an investigation of the conditions of existing sewer pipes in Grahamstown West.
A further estimated R13.2-million will be spent on upgrading sewerage infrastructure. Ngcelwane has made recommendations that the projects be reconsidered to rather include electricity, water and sanitation services more than roads infrastructure.
“I am not saying the roads are up to scratch, but remember that you are committing future ratepayers of Makana for a debt that they will be repaying for a long time,” he said.
“At least for roads you do have another funding called the Municipal Infrastructure Grant, which comes from national government.”
