Tshwane expects substantial revenue increase
Tshwane mayor Solly Msimanga says his council is expected to have an increase in its revenue as it tries to bring financial stability to the country’s capital.
Msimanga made the announcement during a media briefing on the 2017/18 medium-term revenue and expenditure framework ahead of the council meeting in Tshwane inner city on Thursday.
He said that based on the mid-term results‚ revenue is expected to increase substantially‚ mainly because of the following:
- increase in property rates (R90-million);
- increase in interest on investments (R50-million);
- increased grant allocations and roll-overs from other spheres of government (R344-million);
- increase in other revenue (R66-million).
Income from the sale of water‚ however‚ has to be reduced as a result of a decrease in the consumption of water following the introduction of water restrictions last year.
The total operating expenditure will increase by R679-million to address some of the shortfalls on‚ for example‚ contractually obligated expenditure.
The city has expenditure that must be honoured such as the lease and rental of the fleet utilised by the city (R200-million) and expenditure on leased buildings including Tshwane House (R127-million). The city is in a process of reviewing these contracts for operational efficiencies.
Msimanga said expenditure will increase as a result of additional grant funding for a bus operating subsidy for Mamelodi amounting to R72-million‚ and funding for housing top structure amounting to R225-million. The cost of bulk electricity purchases is estimated to increase by R123-million in line with consumption patterns and increases in electricity losses.
Housing and human settlements allocation increased by R129.4-million to fund among others:
- Olievenhoutbosch Ext 60 project;
- acquisition of land in Hammanskraal and acquisition of plot in Leeufontein;
- provision from the sale of the mayoral mansion‚ of which the proceeds are earmarked to fund low-cost housing.
Additional allocation amounting to R30-million was included in the adjustment budget for social infrastructure grants for the construction of community halls at Hammanskraal‚ Winterveld and Mabopane.
“We continue to work hard to stabilise the city’s finances. For example‚ in September last year the city approached the North Gauteng High Court to set aside the so-called Tshwane Broadband contract with Thobela Telecoms on the grounds that the previous administration entered into this contract unlawfully. The auditor-general found the deal to be irregular‚ and determined its value at R2.7-billion‚” Msimanga said.