NELSON MANDELA BAY SUCKERED INTO MONEY JAM: THE NEW AGE

“DA local government spokesman Dacre Haddon said: “While hosting the 2010 World Cup was a great success story for this country and supported by all, the metro was cheated in the process by national and provincial government as it ended up paying more than required.”

A verbal agreement based on trust and in the spirit of cooperative governance has left the Nelson Mandela Bay municipality with a massive financial debt that has severely dented its service delivery plans.

During the 2010 World Cup, an agreement was entered into between the Eastern Cape government and the municipality on how to fund the event as the metro was a host city.

Little did the metro knew that the “gentlemen’s agreement” it was entering would backfire and leave egg on its face.

In the agreement, the costing ratio to fund the 2010 World Cup was divided with national government at 70%, provincial government at 20% and local government at 10%. The metro took this as an agreement between the three spheres of government, and did not anticipate any problems later

According to the metro, its 10% contribution amounted to R340m but it ended up coughing up R878m because the other two spheres of government reneged on the agreement.

The national government paid R2.305bn as gazetted but the actual costs to fund the 2010 World Cup in the metro were R2.384bn, causing a shortfall of R78.7m.

The Eastern Cape government paid R222m when its 20% share was supposed to be R681m. This means there was another shortfall of R459m.

The metro’s 10% obligation meant that it would have paid R340m, but because of the noncommittal to the agreement by the other two parties, the metro ended up facing a bill of R878m, about R537m more than it should have paid.

This is one of the reasons why the Nelson Mandela Bay municipality finds itself in dire straits.

“There was no written or contractual agreement, it was a gentlemen’s agreement entered into by three spheres of government in the spirit of cooperative governance,” said municipal chief financial officer Kevin Jacorby.

“But we have been left in the lurch as we now have to foot the shortfalls from national and provincial governments,” Jacorby said. Eastern Cape local government MEC Mlibo Qoboshiyane last week said the metro should apply for funds from the provincial treasury and it would be considered. However, the DA says it wants the matter clarified as the metro was “shortchanged” in the agreement.

DA local government spokesman Dacre Haddon said: “While hosting the 2010 World Cup was a great success story for this country and supported by all, the metro was cheated in the process by national and provincial government as it ended up paying more than required.

“The recent offer by the local government MEC asking for the metro to apply for additonal funding from the province, when in the first place it did not meet its obligation is laughable,” says Haddon.

He had written to Qoboshiyane asking when the provincial government would meet its obligation, by paying the metro the shortfall, Haddon said.

He would also place a motion before the provincial legislature in Bhisho asking finance MEC Phumlo Masualle to explain why they were not paying the metro according to the initial agreement.

If the DA did not get a satisfactory answer, Haddon said, they would take the matter up with the auditor-general.