The City of Johannesburg is looking to take out R2 billion of new debt in order to address the major infrastructure issues plaguing the economic hub of South Africa.
Dada Morero, the new mayor of the city said that government is looking for ways to fund critical projects and particularly highlighted the fact that the water and electricity infrastructure needed to be addressed.
The mayor said these two areas need financing in the region of R44 billion.
Morero told Bloomberg that the city of Joburg has entered talks with Standard Bank, the World Bank and Agence Française de Développement.
“They are part of the consultations we are doing to get a sense of what we can go to the market for,” Morero said.
“We can’t go beyond R2 billion for now,” he added
The mayor said that he is constricted by the National Treasury regulatory framework and explained that the body has placed limits on the amount of debt the city can raise.
Since 2004, the city has sold around seven bonds and the success of these sales has strengthened confidence in the city’s ability to manage additional debt, he added.
“In the past, we have issued bonds that were successful and we were able to redeem those bonds without any problem,” Morero said.
The mayor is also looking at the private sector in order to raise capital for these upkeeps.
“We are looking at how we can do some of these things off the balance sheet by raising money from private funders or anyone in the market who can help us to close that gap,” he emphasised.
“Our projections are that we would need between R10 and R15 billion just to neutralise or maintain the water infrastructure.”
“The challenges are huge, but there is an appetite to confront them and to find solutions. The only way for us to succeed is partnership with national and provincial governments as well as the private sector,” Morero said.
Less than a week in the job
The new mayor was elected to the office just less than a week ago and is the seventh in three years to lead Johannesburg.
Morero was elected after Al-Jama-ah’s Kabelo Gwamanda resigned under pressure.
The city has had nine mayors from different political parties in the space of eight years.
The constant change of mayors has had a major impact on service delivery.
Decision-making and planning commitments were always subject to changes, hence lack of service delivery could be seen across the city.
Infrastructure degradation, water outages, power cuts, poor business retention, weak internal planning, financial controls, crime, and lawlessness are just some of the issues Morero must address in his new position.
IOL