More than R70-million intended for infrastructural development in Durban has not been used and the city's executive committee, which is under pressure to spend the money before the end of the financial year, decided on Tuesday to reallocate the funds to buy municipal vehicles.
Various city departments are now expected to benefit from R76.8-million worth of new vehicles. The equivalent amount will be deducted from the city fleet's budget of R104.5-million for 2005/6.
"The Municipal Finance Management Act does not allow roll-overs and this means that if we don't use this money before the end of June, it will not be available to us," said City Manager Mike Sutcliffe.
The delay in completing several development projects such as pavements, community health centres and the upgrading of roads has been attributed mainly to the late approval of projects and delays caused by environmental impact assessment studies.
While the proposal got the nod from the executive committee, serious concerns were raised that ratepayers would have to wait for the next financial year before the projects got off the ground.
This is not the first time that the city has had to deal with underspending.
For the 2003-2004 financial year, the unspent portion of the budgeted capital expenditure was R433 million.
The delay was attributed to, among other things, the late approval of contracts, relocation of informal dwellings, delays in the supply of materials and a court interdict.
The report tabled before the executive committee indicated that certain departments would not use all the funds allocated to them for the current financial year.
"The National Treasury has advised that no roll-over of capital funds will be allowed from the current financial year. It is essential that such funds are reallocated expeditiously," the report said.
"The roads, architecture and buildings departments have indicated that because of circumstances beyond their control, an amount of about R76.8 million will not be spent in the current financial year.
"It will be recommended that the money be allocated to the city fleet on the basis that an equivalent amount be reduced from their provision of R104.5-million on the draft capital budget for 2005/6 and be allocated to those departments from which these savings emanated."
Sutcliffe said underspending should not be condoned as it meant that the city was unable to achieve its targets.
"By not building roads and community halls it means black people in the townships will remain disadvantaged."
However, he said he preferred underspending to overspending as the latter had long-term consequences and affected the city's credit rating.