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Severe underspending by Nelson Mandela Bay may cost the municipality R262.5 million in grant funding. Following the 2024/25 mid-year expenditure reports, tabled in December 2024, the National Treasury has written to the Municipal Manager, Mandla George to inform him that the treasury intends invoking section 18 Division of Revenue Act and section 38 of Municipal Finance Management Act, due to substantial underspending by the municipality.

The following payments will be stopped:

R104.6 million Regional Bulk Infrastructure Grant (RBIG)

R143.4 million Urban Settlements Development Grant (USDG)

R14.5 million Informal Settlements Upgrading Partnership Grant (ISUPG)

These funds are meant to be used to improve the quality of life for households. The RBIG is essential to maintaining and upgrading ailing bulk water and sanitation infrastructure. The USDG helps municipalities implement infrastructure projects for human settlements. And the ISUPG is aimed at upgrading informal settlements.

The failure to spend funds provided to improve the lives of residents in the municipality is an indictment on the current administration. The ANC, EFF, DOP, NA, PAC, AIC and AIM coalition has failed the people of Nelson Mandela Bay.

This is not the first time the municipality has underperformed financially. Last year the municipality lost R430 million in grant funding due to severe underspending.

The municipality has until Friday to submit a motivation to the treasury as to why the funds should not be stopped.

Issued by Lawrence Troon, GOOD: Councillor