Gauteng municipalities, including three metros, are owed more than R26 billion.
|||Gauteng municipalities, including three metros, are owed more than R26 billion.
The DA in Gauteng said the municipalities were facing the “financial abyss” because of the growth in debt.
“Debt owed to municipalities in Gauteng rose by R4.26bn (19.2 percent) in the last financial year, between 31 March, 2011 and 31 March, 2012. This is debt older than 90 days,” said DA spokesman on local government Fred Nel.
“The growth in debtors owing for more than 90 days is a serious problem, as the bulk of these debts are usually not recovered.”
The information was sourced from Gauteng provincial gazettes, he said.
About 70 percent of the debt is owed by households, about 23 percent by businesses and 2 percent by the government.
By the end of the last financial quarter, March 31, the City of Joburg was owed more than R11.2bn, outstanding for more than 90 days, compared to R8.4bn a year before.
* Ekurhuleni metro is owed R8.1bn, up from R7.2bn.
* Tshwane metro is owed R3.6bn, up from R3.2bn.
* Emfuleni municipality is owed R2.3bn, up from R1.9bn.
* Mogale City municipality is owed R612 million, West Rand District municipality R8.2m, Randfontein municipality R220m, Lesedi municipality R163m, Westonaria R110m and Midvaal R78m.
* Sedibeng district municipality is the lowest with R652 000 owed, down from R1.7m from March last year.
There was no information for Merafong municipality. Last year, it was owed R490m.
Nel said the R26bn could make a huge difference in the cash flow and liquidity of Gauteng municipalities.
“This amount alone could build 378 000 houses across the province. The impact of debtors in arrears on service delivery is therefore very clear.
“More municipalities in Gauteng are obtaining short-term loans worth hundreds of millions of rand to cover their cash-flow shortages.”
The DA wants the SA Revenue Service to look at “linking municipal arrears with income tax returns”. This, said Nel, would be cheaper than the expensive debt collection methods used.
The party wants municipalities to appoint well-qualified personnel to their financial departments, and to hire more staff at call centres to contact consumers who are in arrears.
The DA said pre-paid electricity meters should be mandatory in all new building developments and solar panels standard in all RDP houses.
“Municipalities must also introduce subsidy schemes for all existing buildings wishing to install pre-paid electricity meters and solar panels,” said Nel, suggesting a partnership with Eskom.
Nel planned to ask all DA representatives in Gauteng municipalities to take up these proposals with their councils.
“This trend cannot be allowed to continue as it will inevitably lead to bankruptcy of municipalities in Gauteng.
“Service delivery levels will continue to decrease and more violent community protests can be expected,” Nel said.
In May, Gauteng Local Government and Housing MEC Humphrey Mmemezi told the provincial legislature that his department and the Gauteng Treasury were implementing a debt strategy to ensure that provincial government departments paid their municipal rates and services.
“We cannot allow a situation where our sector departments are not paying for services rendered by municipalities,” Mmemezi promised.
baldwin.ndaba@inl.co.za
The Star
