City of Durban to borrow R1 billion to fund capital projects

ETHEKWINI Municipality will be acquiring a R1 billion loan to ensure it keeps up with infrastructure upgrades and improved service delivery in the city.

At a meeting on Tuesday, 30 October, the Executive Committee tabled a report outlining the process to issue a Request For Proposal (RFP) inviting tenders for the provision of long-term debt finance to finance the municipality’s capital budget for the financial year 2018/19.

Deputy City Manager of Finance Krish Kumar explained to the Executive Committee that this was a loan budgeted for the 2018/19 financial year which was approved in the City’s budget in May this year.

This was the following through on the processes to acquire the loan, he said.

“This will not be the last time the Executive Committee will be hearing about the loan. Once it is advertised it will come back to the Committee in January and again in May. There is a need for this loan, if we don’t take it we will have to reduce capital expenditure. We only borrow for capital expenditure, nothing else,” he explained.

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Kumar also touched on outstanding debt owed to the City saying the City was doing its best to collect outstanding debt.

He added that the loan will be spent on infrastructure including upgrading substations and networks to ensure a stable supply of electricity to residents.

He said growth in certain areas also necessitated the need to spend on water, electricity and sanitation infrastructure.

“This is what the loan will be spent on. We are trying to grow the economy and the rates base is not growing as much as we would like. We are trying to grow the economy by attracting potential investors but we can’t do this without improved infrastructure,” he concluded.

 

 

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  AUTHOR
Lauren Walford
Journalist

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