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I strongly disapprove of the National Treasury’s unilateral decision to cut the City’s Urban Settlement Development Grant (USDG) funding by R176 million for the current financial year, which comes to an end on 30 June 2018.

The cut will have a knock-on effect on several of the projects that the Transport and Urban Development Authority (TDA) is currently implementing across Cape Town. It will hamper our efforts to provide much-needed infrastructure improvements to those in need, and has forced us to postpone some of our projects.

I want to state categorically that the reduction in our USDG funding has nothing to do with the TDA’s spending performance to date.

The National Government has made this decision a month before the start of the current financial year:

· We were informed in June 2017 already of National Government’s intention of withholding R278 million of our USDG allocation for the current financial year which commenced on 1 July 2017

· In November 2017 we received another notification that R175,8 million of our USDG funding will be withheld

· Then, on 12 March 2018, we received written confirmation that our USDG funding will be cut by R176 million

The USDG funding is used to provide bulk infrastructure for services – that is water, electricity, and sanitation, as well as roads – for integrated human settlement developments. USDG funding is vital to the City’s efforts in addressing our housing deficit and the upgrading of informal settlements.

Given the cut, and as is evident from the TDA’s adjustments budget for 2017/18, we had to postpone some of the planned projects to future years, or had to slow down work on projects that are currently underway.

To summarise, the TDA’s USDG funding for 2017/18 has been reduced from R1 666 224 038 to R1 562 428 134, amounting to a reduction of R103 795 904 or 6,2%. The cut has an impact on our current budget for:

· asset management and maintenance – a reduction of R989 385

· the rehabilitation of roads and stormwater infrastructure, and the provision of new roads for housing developments – a reduction of R55,7 million; and

· the planning and implementation of housing projects – a reduction of R47 million

Despite these cuts, we will not cancel any USDG-funded project.

We remain committed to using our USDG funding allocation for the purpose it was intended – to construct the infrastructure needed to improve the quality of life of Cape Town’s poorest households.

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