By Anél Powell
Executive Mayor Helen Zille on Monday placed an immediate freeze on contract appointments for the 2010 Soccer World Cup, pending a comprehensive financial audit of Cape Town's capacity to host the event.
And a much-needed R31-million is being transferred from the city's capital budget to the ailing fire and rescue services.
After hearing in the first open multi-party government (executive mayoral committee, mayco or MPG) meeting that the city would have to provide at least R1-billion - the total capital budget for 2006 - to build the new Green Point stadium, Zille said: "Do we build this stadium or do we get essential services, like sewerage, to the poor?"
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The deadline for key appointments, from architect to project manager, was set for Monday, but Zille said it would be unfeasible to "rush decisions" without examining the financial implications of the project.
A total of R500-million for the stadium would come from the province, leaving it up to the city to fund the remaining R1-billion.
With a tight deadline of 2008, Zille said the city would have to borrow funds while it waited for income to be generated, and "this will have the most profound impact on the city".
She told chief operations officer Rushj Lehutso, who presented a lengthy project overview: "Go back and rather give us the financial model." Zille said any rash decision taken for 2010 could "bankrupt the city".
Executive committee member for finance Ian Neilson said: "We want to make it happen, but the question is how?"
He said the estimates were "not affordable by the city".
Neilson said: "If one looks at the financial flow it's clear that Fifa gets a massive injection but no cash flow is coming to the city." He meets Lehutso on Tuesday to study the 2010 cash flows.
"The mayor has already voiced her concerns with the premier," said Neilson.
Rasool on Monday night offered to meet Zille and the executive committee to outline the benefits of the stadium, saying these "are of such importance that we should not dent the world's confidence in the city's ability to meets its 2010 commitments".
Although Lehutso said a few appointments had already been made, Zille said no further contracts would be signed until they had reviewed the financial statements next week.
Of the transfer of vital funds to fire services, Neilson said: "This is a welcome item (on the agenda)." The resource evaluation plan, undertaken by the director of city emergency services, indicated a shortfall of at least 680 staff. "We will need to double the staff to what is required over the next three years."
An additional 54 emergency vehicles are needed to comply with legal requirements. Zille said a multi-party body, led by councillor Debbie Schifer and including a representative from each political party in council, would investigate the needs of the department and manage the emergency services crisis.
Neilson reported that the city has spent only 57 percent of its capital budget for the year.
"This means that on the ground we are not delivering services and the city will fall further behind."
He said there was a need for urgent interventions, including the review of procurement policies and contracts hampering service delivery. "Many of these appeals are still in court."
Financial director Ike Nxedlana said: "Measures are being taken to ensure improvements before the end of the year."
The adjustments budget, last amended by the former mayco in December, will remain unchanged, said Neilson, until there has been public participation and portfolio committee consultation.
Zille announced the formation of a standing committee on public accounts (Scopa) to hold the executive to account.
Zille was concerned proposed tariff increases would not meet the city's accelerated growth and demand for infrastructure. She said a rates and tariffs working group representative of all political parties in council would meet to discuss increases and rates before the budget is adopted in May.
"It is important that we align the budget with the N2 Gateway and 2010 projects. We will (with the tariff increases) tease those (matters) out in the weeks ahead," said Zille.
Council meets on Friday to table the 2006/2007 capital and operating budgets.
- This article was originally published on page 1 of Cape Times on March 28, 2006
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