South African municipalities under spent their capital budgets in by R8,5-billion, or 17,1%, in the 12 months to June 30, 2010, the National Treasury reported on Tuesday.

In a statement covering revenue and expenditure for the 2009/10 municipal financial year, the department said that the under expenditure was indicative of "either weaknesses in the ability of municipalities to compile credible budgets, or to manage the implementation of their infrastructure programmes".

Of the aggregated capital budget of some R48-billion, R39,7-billion was spent by the end of the period, with the large metropolitan municipalities spending 88,6%, or R22,1-billion, of their budgets by the end of the period.

Overspending occurred in eThekwini at 112,6%, or R6,7-billion out of its R6-billion adjusted capital budget, followed by Cape Town at 83,3%, or R4,7-billion out of the R5,6-billion budgeted, and the City of Tshwane at 82%, or R2,2-billion of its R2,7-billion adjusted capital budget.

The lowest capital spending was recorded in Nelson Mandela Bay, at 78,9% of budget.

In aggregate, the 280 municipalities covered by the report spent 92,2%, or R196,6-billion, of the R213,3-billion total adjusted budget, and collected 95,1%, or R210,8-billion of the R221,8-billion total adjusted revenue budgeted.

A total of 29 municipalities overspent their total adjusted budgets by more than 15%, while 27 under spent by more than 15%.

Overall, the local governments under spent their total budgets by R18,9-billion, or by almost 9%. In 2008/09 aggregate net under spending was recorded at R16,6-billion, or 9,1%.

R56BN DEBT BURDEN

Meanwhile, metropolitan municipalities collected 92,1%, or R120,4-billion, of their billed revenue against a budget of R130,8-billion, with Cape Town collecting the highest proportion of its budgeted revenue at 96,4%, followed by eThekwini with a 96% collection rate.

Aggregated municipal consumer debts amount to R56,1-billion, with the largest component relating to households, which accounted for 56,3% of the total, or R31,6-billion.

Metropolitan municipalities were still owed a total of R30,6-billion at the end of the period, an increase of R1,2-billion or 3,9% when compared with 2008/9.

The City of Johannesburg was still owed the largest amount, at R8,4-billion, a year-on-year decrease of R713-million. Ekurhuleni was owned R7,8-billion, Cape Town, R5-billion, and eThekwini, R4,6-billion.

Consumer debts owing to secondary cities increased to R11,9-billion, from R8,3-billion.

As at 30 June 2010, municipalities owed their creditors R11,6-billion, a rise of R3,5-billion from the quarter ended March 2010.

Free State municipalities had the highest percentage of creditors outstanding for more than 90 days, at 36%, followed by North West at 31%, Limpopo at 28,9% and Northern Cape at 18%.