Major infrastructure projects to face delays, Treasury warns

Municipalities, including major metros like Cape Town, will have to do more with less money from the fiscus.

FILE: Mayor Herman Mashaba on a site inspection of road infrastructure in parts of Johannesburg on 22 November 2017. Picture: @HermanMashaba/Twitter

CAPE TOWN - National Treasury has warned that major infrastructure projects in municipalities will be delayed as it looks to meet new spending commitments, like fee free higher education.

Municipalities, including major metros like Cape Town, will have to do more with less money from the fiscus.

Treasury says it wants to see large municipalities invest more of their own resources to fund infrastructure projects.

Over the next year, 9% of funds raised nationally will be allocated to local government.

Delivering his budget address on Wednesday, Finance Minister Malusi Gigaba said local governments are still beset by financial management and governance challenges.

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Municipalities are also not charging tariffs that reflect the full cost of the services they provide, particularly for water.

But they will have to reduce their reliance on government to fund infrastructure projects.

“Over the period ahead, we will review the effectiveness of these different support measures and introduce a new instrument design to turnaround some of the most troubled municipalities.”

Government says it will be reviewing the efficiency and sustainability of municipalities' housing and public transport policies.

A look at the 2018 budget by numbers.  Picture: EWN

(Edited by Shimoney Regter)