Cape Town - Cape Town Deputy Mayor
Ian Neilson has labelled the Congress of SA Trade Union's (Cosatu) claim that the Democratic Alliance (DA) controlled city council had underspent its budget by R4bn as "financially illiterate."
On Wednesday, Cosatu issued a statement saying that it, along with its alliance partner, the African National Congress (ANC), had uncovered an additional R3bn that was available to the city as only R4bn out of a R7bn bond market facility had been used.
Cosatu also said that there was an additional R1bn that the Cape Town Municipality had not spent in the previous financial year.
"This underspend in the face of the devastating social injury and huge delivery deficits, is entirely unacceptable," Cosatu said.
It went on to say that this amounted to R4.3bn the DA did not spend and that the money could have provided basic services to all the houses in informal settlements including providing them with water, electricity and sanitation.
Neilson acknowledged that Cape Town's capital budget was underspent in the last financial year, but said this was largely due to delays experienced by the city's transport department.
"That money will be spent. The delays were caused by a tender dispute," he said.
Neilson said four years ago the Cape Town City Council had embarked on a medium municipal bond issue programme with the SA Bond Exchange to raise a R7bn facility.
"We decided to do this in order to save on transaction costs. We used the facility to make three issues, the first of R1bn, the second, of R1.2bn and the third of R2bn," he said.
However, Cosatu's Western Cape provincial secretary
Tony Ehrenreich doesn't buy that saying: "If the money is made available, then they should spend it."
The Cosatu statement also described the situation in the City as a crisis that required immediate intervention by the Finance Ministry and the SA Local Government Association.
"We now formally make the call for an intervention. We are concerned about the disregard shown to the people of the City and their desperate needs, and the ANC will be considering a march to the Mayor's office to reinforce our demands," it said.
Neilson said he would not mind an intervention as long as it included all the 280 other municipalities in the country that were financially unstable.
"National Treasury know what our situation is and they often use us as a benchmark on how a municipality should be correctly run," he said.
Neilson said that apart from the capital underspend, the rest of the City's R19bn budget would be.
He said final numbers of how and where the City's budget would be spent would be released in a couple of week's time.
In its statement Cosatu said it would call for a strike action because of revelation, but Ehrenreich said that it was an option and that no decision had been taken.