Unicity Mayor, Nomaindia Mfeketo, says the city of Cape Town is currently on an unsustainable financial path and concerted action is being taken to turn negative trends around.

Speaking to the media this afternoon, Mayor Mfeketo said the roots of the problems were long-standing such as the city's large staff structure and rising arrears.

"More and more we realise we need to tighten our belts and do certain things that begin to change the situation," the Mayor said.

She said the city had the largest and most expensive staff structure in the country and major structural changes were underway.

The Mayor said the previous metropolitan council took some decisions, though some were important, most have had a negative impact on the city's budget.

Mfeketo cited the example of the Metroplitan Police consisting of 800 officers, which is costing the city R300-million, that had not been budgeted for by the previous administration.

The Mayor also identified rising municipal arrears as the single biggest cause of financial distress, with collection declining from 97% when the Unicity was established to 91,7% by May this year.

"In trying to stabilise the situation we will further look at rescheduling an amount of R320-million in the budget 2003-04, the capital budget, until the next budget," she said.

Cape Town would also look at saving a further R200-million on its operating budget through targeting inefficiencies and unnecessary expenditure.

"Furthermore we have committed ourselves to drive improvements in revenue collection with the aim of achieving at least 95% collection for the current year," the Mayor said.

The city would also dispose of non-core businesses such as Epping Market and Maitland Abattoir, while it is hoped that sale of land assets would improve its income.

Mfeketo said she would be working closely with her deputy, Pierre Uys, the city manager, Wallace Mgoqi and the Mayoral Committee to address the financial challenges. - BuaNews.