The eThekwini Metro Council plans to borrow R3,5 billion over the next three years (starting with R1,5 billion this year), while simultaneously writing off R1 billion in debt on compassionate grounds.
This loan will be taken out even though the Metro has approximately R5,6 billion worth of investments at various institutions.
The interest rate of 7,65% that the Metro earns on its investments is significantly lower than market-related rates.
According to information provided by the former Deputy Mayor, Mr PG Mavundla, the loan is needed to repair seventeen dysfunctional sewage plants. He has since resigned as councillor.
The motivation for the loan is further undermined by the fact that at the end of October 2022, R1,6 billion in capital and operational grants as well as R185 million in disaster aid funds had not been spent.
The Metro's debtors amount to R23 billion, of which Transnet owes more than R900 million. Another R1 billion of poor households' debt will be written off.
The FF Plus demands that the Metro must explain why it needs the loans, whether it has proper debtor control in place, and why the available funds are not utilised.