The Democratic Alliance (DA) is calling for urgent intervention to recover the nearly R2 billion owed by national and provincial departments to Mpumalanga municipalities. This debt is a major contributor to the financial crisis in these municipalities, which now collectively owe over R22 billion to Eskom, Rand Water and for rates and taxes.
According to a recent Mpumalanga Provincial Treasury presentation to the SCOPA, Mpumalanga Government Departments owe municipalities over 1.3 billion for rates and taxes, water and electricity; with the biggest chunk of that debt; over R981 million, owed by the Provincial Department of Public Works.
The presentation to SCOPA also revealed that National Departments, including SAPS, SASSA, and the Kruger National Park owe Mpumalanga municipalities over R572 million for services rendered. Altogether, the presentation revealed that both National and Mpumalanga Departments owe provincial municipalities nearly R2 billion for services rendered. Some of the debt dates as far back to June 2020.
The DA believes that incompetency, corruption, mismanagement of public funds, and lack of effective leadership from the mentioned provincial and national departments, are some of the reasons why Mpumalanga municipalities owe creditors like Rand Water and Eskom over R22 billion. This indicates a deeper governance crisis that leads to failure of delivering basic services.
Currently, ten (10) Mpumalanga municipalities owe Eskom a combined total of R21.4 billion for electricity. They also owe Rand Water approximately R1 billion in water debt, a situation that Rand Water views as destabilizing and a threat to its long-term sustainability. It has also emerged that the outstanding water debt from these municipalities has reached a critical level where Rand Water has considered water service reduction.
The DA would also like to encourage Mpumalanga municipalities to enforce their credit control, debt management policies, and bylaws to claim unpaid amounts from national and provincial state entities. Existing legislation, such as the Public Finance Management Act (PFMA) and Municipal Finance Management Act (MFMA), allows municipalities to terminate services to government entities if their bills are not settled within 30 days.
The DA also welcomes the following SCOPA recommendations:
- Payment of services such as rates and taxes, water, electricity and refuse removal, be included in the performance agreements of Accounting Officers of Sector Departments.
- Sector Departments to enter into payment arrangements with municipalities to settle their arrears and commit to those payment plans.
- Departments to commit paying their monthly accounts consistently to mitigate the accumulation of debt.
It is really concerning that Mpumalanga’s municipal and provincial governments have been in a downward spiral of mismanagement of funds, mounting debt, poor service delivery and corruption, and local communities are suffering as a result.