Cape Town - As mayor Dan Plato signed a €80million (R1.3billion) international loan to upgrade the City of Cape Town’s wastewater plants, he reassured ratepayers there would not be any pressure on them to repay back the loan.
But opposition parties are not buying it.
Plato, premier Helen Zille and several high-level German dignitaries were at the V&A Waterfront to formally sign the agreement.
Plato said: “The taking up of debt is standard practice for any major city administration and, in this instance, necessary to spread the related costs over the lifetime of the wastewater projects to limit any undue burden on the ratepayer. All cost implications have been considered in terms of affordability in advance.”
The loan was issued by German government-owned KfW Development Bank. The final payment is due on November 15, 2033 and comes with an indicative interest rate of 8.10%. The loan, approved in October, is unsecured, payable over 15 years.
Earmarked wastewater treatment plant projects include Zandvliet, Cape Flats, Bellville, Macassar, Potsdam, Melkbosstrand, Mitchells Plain, Borcherds Quarry, Hout Bay, Scottsdene, Wildevoevlei and Gordon’s Bay.
Plato said Cape Town was a growing city and it was important that there was sufficient investment in infrastructure, the diversification of resources and the reliable provision of water services over the coming years as we build our resilience.
Stop City Of Cape Town founder Sandra Dickson said there was no need for a loan to be taken.
“Cape Town is a huge city and we have the funds to upgrade our water systems. It can be done by an adjustment budget or using the reserve funds for major projects. We are going to be paying this loan off in 15 years. They can go and do what they want, but we will hold them to account.”
ANC council leader Xolani Sotashe said the pressure would fall on to the ratepayer.
“Forget about politics, the ratepayer will be the one who will foot the bill for this loan. We have reserve funds, we are a major city and our finances are fairly stable. We cannot be sitting on billions of rands and make more loans. I stress this again, the ratepayer will pay this.”
African Christian Democratic Party councillor Grant Haskin said: “We have funds in reserve that can be used. They could have used an adjustments budget to prioritise funds. The city is still paying off loans it took in the 2000s and we don’t need more loans. We simply don’t.”
KfW Bank chief Günther Bräunig, said through modernisation of wastewater management, Cape Town would be better equipped to face climate change and scarce water resources.
German ambassador to South Africa, Martin Schafer, said the countries were allies in climate change.
“Capetonians have demonstrated to the world that with concerted action it is possible to substantially reduce the water footprint.”
@JasonFelix