EC municipalities fail to spend over R2.2 billion in grant funding

EC municipalities fail to spend over R2.2 billion in grant funding

At least R2.2 billion rand in grant funding has been returned to the national treasury by municipalities in the Eastern Cape over the past four financial years because they failed to spend the funds allocated for key infrastructure projects.

The result of this underspending is that hundreds of thousands of people are being forced to live with sewage in their streets, taps with no water, and no electricity supply to their homes because the people who have been placed in charge are incapable of spending the money they have been given.

Critical infrastructure projects ranging from water augmentation to electrification and bulk infrastructure upgrades have fallen because of maladministration and incompetence.

These shocking figures, which exclude funding returned by the province’s two Metros, were revealed by COGTA MEC, Zolile Williams, in response to a parliamentary question from the Democratic Alliance.

Based on the figures provided, between the 2019/20 and 2022/23 financial years, R1,147 billion of the Municipal Infrastructure Grant (MIG) allocation, R176,2 million of the Integrated National Electrification Programme (INEP) allocation, R315,2 million of the Water Services Infrastructure Grant (WSIG) allocation, and R553 million of the Regional Bulk Infrastructure Grant (RBG) allocation was returned.

Download IQP and the attachment.

Just look at the continuous problems with water infrastructure across the Eastern Cape, especially in areas such as Makana & Alicedale, as well as Koukamma and many other areas.

With a shrinking fiscal budget, every rand allocated as a grant to municipalities must be utilised optimally and effectively.

The unspent R2.2 billion represents a missed opportunity to address critical infrastructure needs across various municipalities. This failure to utilise allocated funds not only hamper the progress of essential projects but also raises concerns about the efficiency and accountability of municipal administrations.

One of the biggest issues within municipalities is the spending on infrastructure grants to address socio-economic challenges and service delivery. This has been a recurring finding within the Cooperative Governance and Traditional Affairs (CoGTA) departments’ annual report throughout the 6th term, raising the question of, “How effective is the support provided by the department to municipalities.”

CoGTA is mandated to support municipalities, yet it has repeatedly failed to rescue the 16 municipalities across the province that are in financial distress. These municipalities have not shown any significant improvement over the past five years.

In light of these revelations, municipalities must undertake a thorough review of their financial management systems and project implementation processes. Identifying the root causes of underspending and implementing corrective measures is crucial to ensure that future grants are utilised in a timely and effective manner.

Strengthening monitoring mechanisms and providing technical assistance to struggling municipalities can help prevent the recurrence of underspending and enhance the overall effectiveness of grant-funded projects.

The DA has a plan to rescue these failing municipalities.