Proposed R2bn development bank loan again denied in Joburg council

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Johannesburg metro councillors voting on the proposed R2 billion short-term loan from the Development Bank of Southern Africa.
Johannesburg metro councillors voting on the proposed R2 billion short-term loan from the Development Bank of Southern Africa.
Alex Patrick
  • Opposition parties in Johannesburg have voted against accessing a R2 billion Development Bank of Southern Africa loan.
  • Councillors voted on Wednesday, with 137 against the motion and 130 for it.
  • The loan is meant for operational costs and will be paid back in June 2023.

A motion to access a R2 billion loan to keep the City of Johannesburg running has been denied.

In a show of hands, councillors voted against the short-term loan from the Development Bank of Southern Africa, with 137 voting against the motion and 130 for it.

This is the second time the motion has gone to a vote in the council.

According to the City, it had secured access to R2 billion but required approval for the application.

On 11 November at the 12th extraordinary council sitting, councillors voted against the DA-led government's request for the loan.

The loan is meant to go towards operational costs and will be paid back in June 2023.

The reasons for opposing the motion were the same on Wednesday as they were two weeks ago.

Opposition parties said because Executive Mayor Mpho Phalatse insisted the City was not bankrupt and the finances were "fine", there was no need for the loan. 

Adolf Marema from the ANC referred to a press briefing by the mayor and Finance MMC Julie Suddaby before the council.

"Just before the council, you had a briefing saying all [is] fine. Are you fine, mayor, are you okay? Will SMMEs be paid?

"If you are fine - you don't need this loan. Will we see the metro cars being driven back to depot?"

READ |Morero peddled 'hysteria' over rental cars - City of Joburg says only 47 fleet vehicles were taken

Marema commented on vehicles from Avis Fleet, which were taken back after its lease lapsed on 31 October.

Opposition parties told the media Avis took the 47 vehicles because of a lack of payment.

Before the vote, Suddaby responded to the opposition, assuring councillors all municipal staff would be paid and the payment included performance bonuses.

"All unavoidable costs will be paid in full and on time.

"We are one of few municipalities in the country that does not owe Eskom or Rand Water.

"Vehicles were returned to Avis because the contract expired."

Speaking on the low revenue collection, Suddaby said there was an apparent cash flow mismatch.

"I had not heard a single argument why, if the decision was right on 27 October [when the motion for approval was tabled for council], it should not still be right on 23 November. Unless it has nothing to do with [doing what's] right."

The council is still in session.

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