Municipalities in the Eastern Cape, excluding metros, owed Eskom more than R186-million in arrears as at 18 January 2016. This included the five municipalities (Maletswai (R44.4-million), Gariep (R29.4-million), Nxuba (R32-million), Ikwezi (R10-million) and Inkwanca R997 000) that were threatened with disconnection by the power utility in December if they did not service their debts.
According to a reply Reply to IQP 48, q 407 to a legislature question I asked the MEC for Finance, Sakhumzi Somyo, reasons for the arrears was due to these municipalities having a low revenue base, illegal connections and challenges with billing systems. He also admitted that proceeds from electricity sales are used to funds other expenditure.
This situation is a direct result of poor management in municipalities where consumers pay for electricity and these funds are channelled elsewhere. This is totally unfair and cannot be tolerated. Our municipalities need to be liberated from poor financial management.
In December, the DA laid criminal charges against the municipal managers of Ikwezi, Gariep, Maletswai and Nxuba for failure to pay funds collected for electricity over the Eskom. I want to challenge the MEC to state what action is being taken against these municipalities for poor financial management and for contravening the Municipal Finance Management Act.
The DA acknowledges the meetings held on government level with Eskom to avoid disconnection to municipalities. However, municipalities cannot rely on bailouts, such as the R55-million paid by the provincial government in December 2015 and January 2016 for Maletswai, Gariep, Nxuba and Ikwezi. Residents and businesses cannot be made to suffer by having the electricity cut off due to poor financial management.
Red lights are flashing in a total of 18 municipalities when it comes to payments to Eskom. In addition to the five municipalities above, Makana owes (R41 million), King Sabata Dalindyebo (R23-million), Nxuba YeTemba (R1, 3 million,) and Sunday’s River (R1, 3 million).
They need to get their financial management right.
If we want the Eastern Cape and our municipalities to flourish, we need to grow the economy and create jobs. Sound financial management plays a huge part in creating the right climate for job creation. — Bobby Stevenson MPL, Shadow MEC for Finance