If the City does not increase spending on its capital budget quickly, they stand to lose millions of rands for projects that could benefit Pietermaritzburg residents.As many residents complain bitterly that the City’s infrastructure and services both appear to degrade further each month, it was revealed on Wednesday at a special full council meeting that over a six-month period, only R156 million of the city’s R571 million capital budget has been spent.And, despite all the efforts taken by Msunduzi to enhance its revenue collection, the amount owed to the City continues to escalate.According to a mid-year budget performance report presented at a special full council meeting on Wednesday, the City’s outstanding debt has increased by R64 million in the last six months.This is in spite of the municipality embarking on an amnesty campaign in October to clear its R2 billion debtors book.Acting municipal manager Nelisiwe Ngcobo told the meeting on Wednesday that the amnesty period would be extended as it did not yield the desired results. This has led to the municipality decreasing its projected revenue collection for the current financial year by R81 million.With the first six months of the financial year having come and gone, the report revealed that millions of rands meant for service delivery remained unspent.Only R156 million of the city’s R571 million capital budget was spent at mid-year.The capital budget includes conditional grants from provincial and national government departments such as the water service infrastructure grant, municipal infrastructure grant (MIG) and housing development grant.At the end of the financial year, council must return unspent amounts of these grants to the departments it received them from.Ngcobo admitted that the City was facing challenges in spending its conditional grants allocations.“We have met as strategic management and we have identified the problematic areas. A detailed turnaround strategy will be presented to council,” she said.Ngcobo said many factors, including the City losing its speed camera fine licence and the delay in the finalisation of the parking contract, had led to it collecting less revenue than it had initially planned.Councillors criticised the municipality for its failure to spend funds and have demanded an expenditure meeting where all general managers must explain to the council why they were failing to spend the funds.ANC councillor Mtuza Mkhize said it was unacceptable that there were funds that remained unspent while the city was facing problems such as potholes and filth. “We need a full report on why the funds were not fully spent. The officials responsible for this must be penalised during performance management,” he said.DA councillor Ross Strachan said an urgent intervention was needed to turn around the situation.“The 74% unspent grants statistics is a clear indication that nothing has changed under the ANC, even after a change in management. This is criminal and speaks directly to services in our city.“The leadership have failed to recruit qualified, experienced and competent managers to run our city and fill our vacant priority posts, which is the ultimate failure,” he said.