The Makana Council is hoping to receive a loan of R50-million from the Development Bank of South Africa (DBSA) for the installation of infrastructure projects in the Grahamstown area.
The Makana Council is hoping to receive a loan of R50-million from the Development Bank of South Africa (DBSA) for the installation of infrastructure projects in the Grahamstown area.
The R50-million loan is split into two categories: a conventional loan worth R30-million and a targeted infrastructure programme loan of R20-million.
The conventional loan will used to upgrade municipal water services and the targeted loan will be used to upgrade underprivileged areas.
According to the loan calculation document distributed during a council meeting last wek, the loan must be repaid over 20 years with payments made every six months.
Therefore, the first payment will be made on 1 July 2011. The interest on the two parts of the loan will be R42 683 516 (calculated at 10.57%) and R16 738 757 (calculated at 6.75%) respectively, bringing the total amount that will be owed (including interest) over 20 years to R109 422 273.
The council is optimistic that it will be able to repay the loan in this way, agreeing that it was cheaper to take loans from DBSA as “there would be no cost to project management”.
Thandy Matebese, Makana Municipality spokesperson, says that the council agreeing to approve the loan is the first step in the process of development.
“The infrastructure of Grahamstown is old and ageing, but the town is developing,” he said. “We need to see to it that service delivery is given to our people,” said Council Speaker Rachel Madinda.
The council has also appointed a task team which will determine which areas need help with infrastructure upgrading. The identified priority areas include an extension to Cacadu Road to create a complete ring road. In the Vukani area, A Street will be extended to B Street ring road.
In Riebeeck East and Alicedale, the access roads will be improved as well as a storm water correction and in Extension 6, Ntwasa Hlobo Street will be upgraded.
This decision will benefit the community as the owners of taxis and vehicles will save on maintenance and this will improve road worthiness, according to the agenda.
This should advance road safety and the municipality will also benefit by saving on road maintenance. The majority of residents have complained about bad road and storm water conditions.
Now that the decision to obtain the loans has been approved by the council, they will notify the public as well as the national and provincial treasuries and then put out tenders.
