Since the Go! Durban public transport project has not been finished, the National Treasury and the Department of Transport have threatened to stop providing funding to the eThekwini municipality.
The project, which cost R9 billion and was supposed to be completed by 2016, aims to make transport accessible and affordable for all eThekwini residents.
To this day, it is still unfinished.
In a letter seen by Sunday World, the Treasury emphasised its intention to use Section 18 of the Division of Revenue Act (DoRA), which permits it to halt the transfer of specific funds to a municipality in the event that it anticipates that the municipality will not use the majority of the funds allotted for particular programmes during the fiscal year 2024/2025.
The Treasure proposed to stop part of the 2024/25 funding for the public transport network grant (PTNG), the neighbourhood development partnership grant (NDPG), and the urban settlements development grant (USDG) due to the municipality not making good use of the allocated funds.
Explanation sought from the municipality
“Acting on the above, the National Treasury hereby informs you of the intention to stop an amount of R771.4-million from your 2024/25 PTNG allocation of R921.4-million, an amount of R18.5-million from your 2024/25 NDPG allocation of R152.6-million, and an amount of R53.3-million from your USDG allocation of R1.4-billion in terms of Section 18 of the 2024 DoRA.
“This decision will not in any way affect future allocations to your municipality,” reads the letter in part.
The letter emphasised that the municipality must reply to the National Treasury with a thorough explanation of why its spending as of December 31, 2024, is less than 40%.
According to the letter, the response should include a progress report on approved projects, listing their names and current status.
The municipality is also expected to outline its cash coverage for transferred grants, ensuring that any unspent funds are properly set aside.
It is also required to ensure that all financial reporting aligns with the Municipal Standard Chart of Accounts system and to compare its initial cash flow projections with actual performance.
A report on any approved rollovers from the 2023/24 financial year must be submitted, along with a commitment that the allocated funds will be fully spent by June 30, 2025, meaning no rollover requests will be made for funds that are at risk of being stopped.
C3 corridor inspection
According to Transport Minister Barbara Creecy, the department is still not persuaded that the city is prepared to operate a fully compliant C3 corridor that warrants the R9-billion in prior funding.
She wrote to Vusumuzi Xaba, the mayor of eThekwini municipality, stating that there is still a lot of work to be done.
This worry stems in part from an unplanned inspection of the C3 corridor that took place on December 4 and 5, 2024.
She said the findings from this visit cast doubt on the accuracy of the market share estimates from the initial surveys.
According to Creecy, a lot still needs to be done, including confirming the exact market share of each affected operator, starting negotiations with them, and updating the operations plan.
“As discussed in our meeting, no further public transport network grant funding for the remainder of 2024/25 and 25/26 will be disbursed to the city until the above is completed and approved by the department and operations have commenced at a scale to achieve 20 000 passenger trips per weekday six months after launching,” she said.
“Therefore, for 2024/2025, no further PTNG funds will be disbursed apart from the R150-million already transferred, and R771-million will be withheld. In 2025/2026, if there is still no progress, grant funds will be permanently stopped.”
ActionSA has submitted an urgent motion to the municipality, calling for accountability over the stagnant project.
Zwakele Mncwango, the ActionSA chairperson in KwaZulu-Natal, said the party wants answers on the strategy put in place to complete the project and the consequences that the municipality will face for the loss of grants.
“In our motion, we are calling on the executive committee to provide an immediate comprehensive plan to complete Go! Durban and disclose the consequences of losing this grant, accountability measures, and mitigation strategies,” said Mncwango.
Future funding will not be affected
Gugu Sisilana, the spokesperson for the municipality, confirmed that it has sent written responses to the Treasury to address some issues raised in the letter.
She further said that the letter would not affect future funding for councils based on 40% performance at the halfway point.
Currently, said Sisilana, the city is at 41% mid-year, so the suggested budget cuts from the Treasury do not apply to eThekwini.
Regarding the public employment programme, which is part of the NDPG, the city has promised to speed up spending, and it said the Treasury has agreed to support this.
Sisilana said: “The municipality acknowledges National Treasury’s concerns as outlined in the 2024/25 mid-year expenditure report, submitted in terms of the Division of Revenue Act [Act No. 24 of 2024], as amended, and the Municipal Finance Management Act [Act No. 56 of 2003].
“The identified challenges relate mainly to the current impasse with the transferring officer responsible for the public transport network grant, which has affected grant compliance and performance reporting in respect of the Go!Durban project.
“We remain fully committed to resolving these issues in close collaboration with National Treasury and the transferring officer to ensure compliance with all relevant legislative requirements.
“To this effect, the city leadership is engaging the Ministry of Transport regarding the public transport network grant and related projects such as Go! Durban.”
