Arrears of billions of Rands in the Emahlahleni and Govan Mbeki municipalities in Mpumalanga are extremely concerning and the Democratic Alliance (DA) will now request Cooperative Governance and Traditional Affairs (CoGTA) Minister Nkosazana Dlamini-Zuma to intervene.
The provincial government has failed to appoint administrators and the DA will liaise with our counterparts in the National Assembly to urge Dlamini-Zuma to manage these two local municipalities who owe their creditors a total of R7.7 billion for services rendered.
Non-revenue generation, together with inaccurate billing systems have created a situation in which the amount of money owing to creditors will always increase because there is a lack of cash at hand to settle debts.
Information received from the monthly reports of August to October 2020 shows both municipalities are owed R7.59 billion for services which they provided to consumers. If it capitilised on this money, they could have avoided this financial crisis that is tearing the two municipalities up – as a DA government would have done so as to improve service delivery.
In Emalahleni local municipality:
For the month of October 2020 they had outstanding creditors to the tune of R5 billion of which the amount of money owed to Eskom alone was R4.6 billion. In addition to Eskom, the municipality owed the Department of Water and Sanitation (DWS), Glencore Operations SA, Anglo Operations, and Eskom Wilge an amount of R243 million for the provision of bulk water.
Emalahleni has been in a dire financial crisis since 2016 and despite calls from the DA to place this municipality under administration, Mpumalanga Premier Refilwe Mtshweni-Tsipane and CoGTA MEC Mandla Msibi have refused while the situation continues to worsen.
In Govan Mbeki local municipality:
For the month of August 2020 the total amount owed to creditors was R2.7 billion. This is made up of Eskom which is owed R2.1 billion and Rand Water R311 million. This municipality also lost 75.05% of the electricity which was purchased and 36.26% of the total water purchased.
The only way to turn around the finances of this municipality is to bring in an administrator and for Dlamini-Zuma to intervene.