The clock is ticking for the Bay municipality’s human settlements directorate with about 20 days remaining before the national department potentially revokes conditional grant payments totalling nearly half a billion rand.
The decision is in relation to significant underspending by the city of a previous tranche.
The department said in a letter, dated February 5, that the two payments would be withheld related to the urban settlement development grant (USDG) and the informal settlements upgrading partnership grant (ISUPG), totalling R305.4m and R135.5m, respectively.
Responding to the news, the municipality said on Sunday its understanding was that it had a further 30 days to resolve the matter.
The metro blamed various factors for the underspending, including what it said were delays in the environmental impact assessment (EIA) process.
In this regard, it would be calling on the national human settlements department to pressure the environmental department to provide authorisations.
EIAs are intended to ensure independent scrutiny of proposed developments to ensure they meet economic, social and environmental bottom lines.
News of the decision to withhold the money was conveyed in a letter from national human settlements department director-general Alec Moemi to the Bay’s acting city manager, Lonwabo Ngoqo.
In the letter, Moemi said the department had alerted the metro almost a month ago about the perilous situation around its future receipt of conditional grants.
“The national department issued a letter on January 19 to inform the metro of the department’s intention to withhold the next tranche payments of USDG and ISUPG, amounting to R305.4m and R134.5m, respectively.
“The metro was allowed seven days, in line with the Division of Revenue Act, to respond, specifying reasons why the department should not proceed with the intended action.
“The metro responded. However, the proposed turnaround was deemed unsatisfactory by the department.”
Moemi said the Act allowed the department to take the next step.
“A transferring officer may withhold a transfer ... for a period not exceeding 30 days, if there is significant under-expenditure on the previous transfer during the 2025/2026 year.
“The national department [of human settlements] hereby notifies the [Nelson Mandela Bay] municipality that the next transfer will be withheld on both the USDG and ISUPG.”
The metro’s human settlements political head Thembinkosi Mafana said there were several reasons for the underspending.
“There were a number of contributing factors which weren’t envisaged initially, such as the delays on EIA authorisation so projects can start.
“We are currently in discussion with the [provincial environment] department, with the purpose of unlocking some of the easy-to-do activities, so expenditure can improve with meaningful service delivery.”
He said the underspending by the metro was also due to a pending court ruling.
“This is the matter of the Walmer [township] invaders that blocked an area of development in Airport Valley.
“The matter has been with the court for so long, with no final ruling on it.”
He also pointed a finger at the roads directorate.
“The expired contract by the roads department is also affecting us.
“A contractor was not assigned work for wards 54 and 37, until it expired. On this matter, consequence management must be implemented.”
Mafana said the city would try to work with the human settlements department to address the situation conveyed in Moemi’s letter.
“They are also tasked with the responsibility of providing support when it is needed.
“In this case, we will be engaging them to assist on EIA-related issues so that authorisation is provided by the department of environmental affairs for projects to be implemented.
“At the same time, we are moving funding to where we have current ongoing projects which are not affected by the EIA process.”
He said the metro would also be calling on the minister and director-general of the human settlements department to engage with the justice minister and office of the chief justice.
“We want them to assist in speeding up the ruling in the Walmer Airport Valley matter.”
He said the total R439.9m from the USDG and ISUPG transfers that was being withheld would have been used to build infrastructure.
“The money was going to be used for infrastructure development in Walmer, Motherwell, KwaNobuhle and Jachtvlakte [in the northern areas].”
Mafana said the metro was still convinced it could resolve the problems and receive the conditional grant funding.
“We have been given 30 days to do [a] turnaround, and we are busy with that.
“The money has not yet been taken. It has been withheld.”
The Herald
