Johannesburg has a severe housing backlog. Picture: SUPPLIED
Johannesburg has a severe housing backlog. Picture: SUPPLIED

SA's economic hub, Johannesburg, could have R180m cut from its adjustment budget if the National Treasury does not intervene to resolve a row between the metro and the provincial government over a housing grant.

The adjustment budget is the mechanism by which a municipality may revise its annual budget during the financial year. 

The spat, which erupted after the housing grant was gazetted in November, is between the DA-led coalition council and the ANC provincial government.

The council insists the grant was cut without reason or warning, while provincial housing settlements MEC Uhuru Moiloa said in December that it was “due to the City of Joburg’s underperformance on human settlements, its failure to pay developers for work done and its failure to work with the department in the delivery of houses to deserving beneficiaries”.  

The city then called the statements “grossly misleading”.  Johannesburg mayor Herman Mashaba also accused Moiloa of playing politics.

 The city has a severe housing backlog and has asked the National Treasury to intervene in the  saga in which the allocation of the human settlements development grant (HSDG)  was revised down from an allocated R249m to R68.9m.

In the letter sent to director-general Dondo Mogajane on January 10, acting city manager Floyd Brink detailed the battle with the provincial human settlements department over the grant, which Mashaba has said would have serious implications for the city’s housing projects.

"Due to the profound impact that the HSDG reduction will have on the city, it is critical that the dispute receives urgent attention. The city is in the process of compiling  its adjustment budget, which will be tabled in council on 31 January 2019. Accordingly, should the dispute remain unresolved, this would result in the city having to reduce its budget by a staggering amount of R180m," Brink wrote.

He said that it would result in the city being unable to meet contractual obligations to developers, and this would result in  delays in service delivery and potentially unauthorised, irregular and wasteful expenditure.

Brink asked Mogajane to convene a meeting with the city, the department of human settlements, the provincial treasury, the national department of human settlements and the National Treasury to resolve the matter. The city has asked that the meeting take place this week and that Mogajane act as mediator in the dispute "should the need arise".

The National Treasury said it had received the letter from the city and was in the process of responding to it.

Luyanda Mfeka, Mashaba’s spokesperson, said the city hoped that the National Treasury would “promptly intervene”.

“However, should these efforts fail, the city will consider all other legal avenues to protect the interests of the most vulnerable in our society, including approaching the courts as a last resort,” Mfeka said.