Housing spree warning

2014-10-16 00:00

ETHEKWINI officials have warned that rates in Durban will jump five percent next year — on top of other increases — if councillors enforce a plan to spend non-existent money on houses.

Responding to an ANC-driven plan to spend three times the budget for housing this year — allegedly in a scramble for the 2016 elections — officials issued a three-page report that featured warnings and alarms for the city in every paragraph.

Co-signed by city treasurer Krish Kumar, it said that, this time, there was “no commitment” from the province to bail out Durban’s “planned” R1,1 billion overspend on additional houses — and forecast “an increase in rates of at least five percent” if the city had to borrow the money.

Meanwhile, there was uproar at the human settlements committee meeting yesterday when ANC councillors asked to “delete” all three options recommended by officials to save the situation — and objecting councillors were accused of ignoring the needs of the poor.

Despite the allocation of only R527,6 million for “top-structure” houses in the recently approved budget, “anticipated expenditure” is already listed at R1,64 billion.

City officials also warned that they had discovered the “same pattern” — of spending three times the agreed budget — in housing infrastructure, where “R130 million is approved for 2014/2015, whilst the projected [cost] is R387 million”.

But officials were so alarmed at the extra R1,1 billion committed for houses that they requested “council authority” to cover the loss — effectively saying: “If you do this, it’s on you”.

Durban housing projects are generally co-funded by the KZN Department of Human Settlements, which bailed the city out with R709 million last year.

But, yesterday, officials pointedly stated: “The municipality has had several meetings with the KZN DoHS to seek commitments on funding for additional projects; to date no commitment has been received”. The warnings kept coming: “This report is to appraise the committee of the cost implications and concerns by the audit committee”.

However, committee chairperson Nigel Gumede said “improved capacity” meant the city could now deliver thousands more houses annually.

“We can see we have produced more than our target — we did not realise we can actually deliver more,” he said.

DA Exco member Heinz de Boer told the committee: “We agree on the need to build more houses, but we won’t be able to provide any service if we bankrupt the city. This could mean a five percent increase for ratepayers, which is completely unacceptable.”

In a tense exchange, ANC caucus whip Diana Hoorzuk said: “If the DA wants to build [only] 3 000 houses per year, they can go that way”.

Officials said three options for the future “require consideration” by the council — including that “only projects in the approved budget be implemented”, but the ANC asked that the options be removed, triggering a strong objection among opposition councillors.

Gumede resolved that an urgent “special meeting” on funding be held between the mayor, the city manager and KZN authorities before voting on the officials’ appeal to apply the spending brakes.

De Boer told The Witness: “This blind spending is really about elections in 2016, and it’s not sustainable.”

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