• Eastern Cape Rising Sun

BCMM: “The city is not in debt and financial strain”

By Khuthala Nandipha

Buffalo City Metropolitan Municipality has rejected rumours that they will not afford to pay salaries from January 2020.

In a scathing statement, the Metro accused a daily newspaper of continuously trying to discredit the municipality and paint them as chaotic, corrupt and falling apart.

“We can assure the public and our employees that BCM will be able to pay salaries and honour all its financial obligations in January and beyond. The City is not in debt and financial strain,” assured Samkelo Ngwenya, spokesperson for the Metro.

Last month during the Council Lekgotla, BCMM’s Chief Financial Officer Ntsikelelo Sigcau assured that they are in a healthy financial state. He cautioned however that when looking into the growth of the City’s economy, it must be done within that of the country and the province.

“The total budget adopted by the council is R37.5 billion over the Medium-Term Revenue and Expenditure period, with R8.7 billion of this allocated for the current financial year. R7.12 billion of this budget is being spent on capital and operating projects, giving a decisive boost to the City’s infrastructure,” said Ngwenya.

The key priorities of this budget are water and sanitation, roads and stormwater infrastructure, human settlements development, transport infrastructure and electricity. The municipality began the new financial year with R1.3 billion of cash reserves which enabled them to give their 50 wards R1 million each to tackle socio-economic challenges.

The National Treasury and the rating agencies have continuously given the city’s finances a clean bill of health. “Last year, National Treasury chose us out of all the Metros in the country to inject some additional R200 million in April for infrastructure development,” enthused Ngwenya.

The Metro’s assets have increased from R17.3 billion to R 23.6 billion in four years. Rates collection, however, is said to be below their set target of 92%, at 88%, a growing concern for the Metro with outstanding debtors increasing year-on-year. 

Despite the Metro’s healthy financial status, Pakati announced that BCMM ratepayers should brace themselves for major tariff increases. Property rates are expected to rise by 9%, and electricity costs up 8.39% by 2022. Electricity is set to increase by 8.39% every year between 2019 and 2022 period. New tariff increases were adopted in July this year.

Water, refuse removal and property rates have all gone up. Sewerage tariff is projected to increase by 9.4% by 2020. Border-Kei Chamber of Business, Les Holbrook had said: “Anything that is above 4%, which is the inflation rate, is too high. The tariff increases should be in line with inflation and nothing above that”.


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