It is not only businesses but also municipalities that are suffering as a result of slow payments from provincial departments. As at the end of the last financial year, on 31 March 2012, municipalities in the Eastern Cape were owed R132 million by provincial departments.
According to a reply to a parliamentary question I asked the MEC for Finance, Phumulo Masualle, states that an amount of R121 million had been outstanding for more than 30 days (subs: R132 million – R11 million = R121 million) and R107, 2 million for more than 60 days. (subs: R13.7 million + R11.1 million = R24. 8 million. R132 million – R24.8 million = 107.2 million). For the reply, click here:
Earlier this month I revealed that businesses were owed a total of R1, 4 billion by the province as at 31 March.
Cash flow is the life blood of service delivery. The trickle down of payments result in municipalities being squeezed by the province on the one hand and consumers on the other. Earlier this week the DA revealed that municipalities were owed a total of R4, 7 billion by consumers.
The impact of this is littered streets, potholed roads, crumbling infrastructure which is a deterrent to investors.
Although some departments have improved in paying their debt compared to the end of the last financial year, Health and Education remain the worst performers.
To stop the rot the province needs to set the benchmark that others must follow by paying municipalities timeously. The DA will continue to raise this issue in the legislature to ensure financial accountability improves and along with it, service delivery.
The total amount owing by the main culprits, are the Departments of Public Works (R48, 9 million), Education (R39, 6 million) and Health (R36 million).
The biggest amounts owing to municipalities is Nelson Mandela Bay Metro (R17 million), Buffalo City (R17, 7 million), Amatole (R9, 4 million), OR Tambo (R9, 2 million) and Makana (R8, 9 million).