By: Nghiinomenwa-vali Erastus
The latest analysis of the City of Windhoek’s finance indicates that it cannot afford to provide the necessary services and facilitate economic activities for all social classes.
Moreover, the councillors’ scrutiny of the latest budget has revealed that expenses have been cut to the bone.
“According to our opinion, to such an extent that certain service deliveries are under real threat,” said councillor Jurgen Hecht.
Hetch has also delivered a bleak medium term as he indicated that the city management and councillors have not found a solution to the City’s financial mess apart from selling virgin land back to the government.
“It is thus very evident that, apart from any exceptional land sale revenue, CoW is stuck in a cash flow dilemma for which no financial strategy and remedy has been found over the past few years,” he revealed.
The city finances are in a state that it should be declared bankrupt, as it has been financially insolvent for the past 10 years. Cumulatively, its losses amount to N$3,8 billion.
Insolvency means, in principle, the City’s ability to settle its long-term obligations as they become due is compromised.
“This means CoW cannot settle its current expenses and liabilities by means of its cash resources and outstanding debtors,” stated councillor Hecht.
Hetch has also questioned the city management on what kind of development could have been done with the N$3,2 billion loss.
Since 2020, the city management and its councillors have struggled to meet the immediate obligations/expenditures that enable service delivery to the citizens and businesses in the capital city.
As the City’s management faces a funds crunch, the initial capital expenditure budget of N$1,1 billion was reduced to N$ 630m. Even this envisaged reduction in expenses is unlikely to be achieved.
This reduction comes when the City’s population increases and entrepreneurial interest has also increased at the micro level with more demands for space, electricity, parking space, and other enabling infrastructures.
WATER INSECURITY EMINENT
One of the components that will suffer from reduced capital expenditure is the water supply to the residents and businesses.
Councillors indicated that the future water supply to the City is extremely concerning.
The councillors’ analysis shows that CoW has an unaccounted water loss of approximately 25 per cent to 30 per cent due to the existing water pipe infrastructure.
If the estimates are accurate, then for every 100 cubic metres of water bought from Namwater, the City only manages to bill 75 cubic metres.
This is due to ageing and brittle water pipes, so-called reticulation losses, as well as staff and metering problems, councillors’ analysis revealed.
Over the past few years, no maintenance has been done, and it has been advised that it would be necessary to invest N$100m in the city water pipe infrastructure over the next five years.
Regarding capital expenditure, it has been identified that the City requires a bigger output capacity on its existing water treatment plant, ‘New Goreangab WTP’ (NGWTP).
Similarly, the Gammams WTP, which pretreats and filters the direct domestic sewerage water and feeds this to NGWTP, must be upgraded.
Thus a new and higher capacity WTP needs to be built within
the next four years at estimated costs of N$ 1,2 billion. Water produced by NGWTP costs approximately N$8 per cubic metre – this makes up 24 per cent of the total water bought and is 36 per cent cheaper than water bought from Namwater.
Another burning issue for the financially crippled city management is the Kupferberg Landfill site which will reach the end of its lifespan in two years.
The analysis shows that the costs for a new and proper substitute landfill are currently estimated at N$ 230m- this was recently presented as part of an Integrated Waste Management Plan for the following five years until 2027.
However, the councillors indicated that no details were provided as to how the total envisaged cost of N$303m will be financed.
No strategic financing is available for these two major capital projects amounting to approximately N$ 1,5 billion.
The councillors indicated that their findings indicate a dire situation crippling and will continue to cripple the performance and service-delivery of CoW both presently and in the near future, irrespective of which political party/ies dominate Council.