SPEECH BY EXECUTIVE MAYOR ALDERMAN PATRICIA DE
LILLE AT COUNCIL MEETING: 27 JULY 2011
Mr Speaker,
Good morning, goeiedag, molweni.
There has been a lot said about the City’s finances and capital spending
over the past few weeks. Some people have sought to portray us as a city
in crisis, or one that is supposedly unable to deliver on its mandate and is
not fit to handle public money.
This administration, unlike the governing party at a national level,
welcomes robust opposition and constructive criticism.
However, as democrats, we must assume that those who wish to serve
know fully the system in which they serve.
We all have a duty to act responsibly. We have a duty as the elected
government to manage public funds transparently and to ensure that they
have the greatest effect. The opposition has a duty to hold this
administration to account.
They do not serve that duty when they carelessly call for officials and
office-bearers to be dismissed, despite what the evidence actually says.
How then are we supposed to take them seriously when there might be
genuine grounds for someone to be dismissed, if every occasion –
legitimate or not – is used for grandstanding and the scoring of the
cheapest political points?
Let me be clear and let there be no confusion: The financial management
of the City of Cape Town is without peer in South Africa.
We have said this many times, but it is worth reminding this Council that
this City has received seven successive clean audits, has had its credit
rating improved and has been recognised by the National Treasury as a
model of financial management.
I would also remind this chamber that we have achieved these successes
having inherited a City that was in financial crisis in 2006, after years of
ANC misrule.
Under the ANC, a slash and burn policy saw the City lacking specialised
skills. This hampered service delivery and the City faced bankruptcy.
Through careful and systematic management, we have reversed this
situation and ensured that Cape Town stands virtually alone as an
example of fiscal probity and service excellence.
We have also ensured, since 2006, that we have maintained our capital
spending on key projects and infrastructure improvements. If we had not
invested in this manner, there is every chance that we might not have
been able to keep the lights on or the water running from our taps.
Instead, our sound financial management has also seen us balance a
number of important priorities. These include: ensuring that we upgrade
our ageing bulk infrastructure; investment in critical projects to build an
inclusive city such as the IRT; and the provision of the most extensive
package of free basic services to the poor of any metro in the country.
One of the most important effects of sound financial management can
also be seen in how we have managed to dramatically increase
expenditure on upgrades in informal settlements since 2006.
As I have outlined in my reply to a Council question, it is clear that prior
to 2006 there was no systematic plan in place to deal with the most basic
needs of people living in often unacceptable conditions.
Last year, we spent approximately R23 million on combined operating and
capital expenditure for water and approximately R122 million on
combined capital and operating expenditure for sewers – all for upgrading
these settlements.
There is still much work to be done, but it is clear that we have made
progress.
Given this evidence, I find it surprising that some members of this Council
can accuse us of being anti-poor or financially irresponsible, when the
evidence is there for all to see.
Mr. Speaker, the opposition is entitled to their opinion. But they are
certainly not entitled to their own version of the truth.
That being said, I must inform Councillors that we are disappointed with
the capital spend for the last financial year, which currently stands at
71,5%.
This is below our target of 80%.
However, it is worth noting that, since 2006, we have spent on average
80% of our capital budget per year and this figure is higher than the ANC
ever achieved while in office.
Unfortunately, in the real world of delivery, there are often factors beyond
our control that influence spending. Our responsibility now is to ensure
that we do everything possible to mitigate these risks and ensure that we
aim for a spending figure in excess of 80% for this financial year.
I would ask this Council to listen to the reasons accounting for our capital
spending figure so that they may execute their duties of oversight with
the full and proper body of information we have.
This is an explanation and not an excuse.
The reasons for our capital expenditure figure include: the late transfer of
R168 million for the IRT from the national government, which was
impossible to spend in the short time available; the over R270 million
saved on the stadium; and tender appeals, especially a court judgment
last year that has allowed any bidder to appeal a tender award within
three weeks – resulting in lengthy exercises that have affected over R100
million worth of spending in the last financial year.
There were additional factors which were also beyond our control. These
include: the delays in plant and equipment as a result of the tsunami in
Japan; a bitumen shortage in the Western Cape and the Cape Town
refinery’s decision to stop manufacturing 60/70 penetration grade
bitumen, which negatively impacted on some projects; the delay of the
Lotus River upgrading project due to the need to relocate existing
informal dwellings to the serviced site with refusal from the community to
move until all services had been provided; the delay of non-motorised
transport projects city-wide due to longer than expected public
engagement processes and unusually long design periods; and land
acquisitions which have taken longer than expected due to protracted
negotiations with owners.
These and other factors have all contributed to the unsatisfactory capital
spending for the past year.
However, I must emphasise that all spending in the City of Cape Town
complies with the law, the strict provisions of which are often ignored in
other municipalities.
Indeed, the straight-jacket of compliance regulations was highlighted with
Minister Trevor Manuel at a joint Provincial cabinet and Mayco meeting
with the National Planning Commission last Friday.
Furthermore, a list of these compliance issues that hamper delivery has
been sent to President Zuma, seemingly to no effect.
Add to this the constant engagement our officials have with
representatives from the National Treasury on this very issue.
Councillors would serve themselves and their constituents better if they
investigated the full dynamics of inter-government engagement before
quickly appealing for the intervention of the national sphere of
government.
I would also like to point out the apparent contradiction regarding the
City’s borrowing.
During the election campaign, Cllr. Ehrenreich criticised the City for even
considering borrowing on the bond market.
Now, a short while later, Cllr. Ehrenreich accuses the City of not making
maximum use of this facility.
The fact remains that because of the City’s effective financial
management, we are able to access bond finance at a rate lower than any
other metro. This is, however, a facility that we will only use when
required.
Let me be clearer still: the majority of our under-spending relates to
Transport, Roads and Major Projects (TRAMP) and does not affect other
areas of service delivery.
We will continue to provide sanitation, staff clinics and build houses.
In the past year, for instance, a total of 7 723 new housing opportunities
were created. Furthermore, the City has Levels 1 and 2 Accreditation by
the National Minister of Human Settlements – a further show of
confidence from the national government which means that we now have
the delegated authority to prioritise projects, implement national housing
programmes and undertake the administration of subsidy approval for
beneficiaries. And our backyarder strategy is on track with the
appointment of a service provider to undertake studies in the City’s own
housing areas of Hanover Park, Langa and Factreton.
I would also remind Councillors that the money that has not been spent,
especially as it relates to TRAMP, will roll-over to the new financial year
and will continue to fund the roll-out of the IRT.
Indeed, it is a mark of confidence in this administration that the national
government provides funds for this critically important project.
Mr. Speaker, as we return from recess, we can reflect on the progress
made in a number of critical areas.
We have rightly celebrated the renaming of Eastern Boulevard to Nelson
Mandela Boulevard. We look forward later this year to recognising
Christiaan Barnard, Chief Albert Luthuli and Kratoa as we build a city that
is even more inclusive.
The Provincial Commissioner of Police has approved the plan of our Metro
Police for the coming year, which has a special focus on tackling drugs,
alcohol and illegal firearms – without qualification.
This is an important vote of confidence as we make our city even safer.
I have continued to engage the community of Hangberg over a series of
meetings as we work to ensure that we build a lasting solution to that
community’s numerous challenges as the City becomes even more caring.
And we will soon bring to Council a recommendation that we support the
creation of an Economic Development Agency (EDA) as a critical way of
ensuring that we develop a coherent economic strategy for the city
region. The EDA, in conjunction with the Provincial Government and other
stakeholders, will ensure that we have economic growth and development
that is inclusive.
In this economic climate, now more than ever, we must do all that we can
to create the enabling environment in which investment can grow and
jobs can be created.
At the same time, we are also exploring every possible short-term
intervention aimed at reducing poverty. We are exploring ways that we
can maximise the City’s use of the Expanded Public Works Programme
(EPWP) to ensure that we can provide dignity to some of the people who
need our help the most.
Finally Mr. Speaker, we are ready to start with the Portfolio Committees
next week. All Councillors have an important contribution to make. They
will bring with them a mix of experience and enthusiasm that will help
improve this City’s programmes.
As they begin this important work for the Council, I would ask that we all
work together to make a great city even greater.