“We are ‘technically’ bankrupt!”
"We do not have our own funds. We are grant dependent."
The Mayor of the Modimolle-Mookgophong Municipality stated on a national television broadcast that the coffers have run dry and the municipality is technically bankrupt.
Mayor Sechele Sebolai told Die Pos on Monday, 13 May the municipality is however on a turnaround trajectory and has settled some of the creditors and has entered into payment arrangements with some of them, including Eskom and Magalies Water.
During the television interview with Tumelo Mothotoane of ENCA’s (news channel) Road to the Election on Monday, 29 April Sebolai said:
“We are technically bankrupt – we are grant dependent. We do not have funds so we cannot say exactly when we will be able to fix the streets,” he said.
Die Pos has reported previously on the municipality being assisted by the Roads Agency Limpopo (RAL) to repair several streets in town.
Many residents who heard the mayor’s statement were very concerned as the municipality has been in financial straits for many years.
When asked about his statement on television, Sebolai responded as follows:
“The statement was meant to suggest that we are on the verge of being bankrupt, because at the time the municipality did not have enough cash to settle creditors over R1,3 billion.”
Sebolai was appointed in July last year after the previous mayor Marlene van Staden passed away. The ANC took over the reign of the municipality from the DA, EFF and VF Plus.
“The municipality has been approved for a debt relief programme with regards to the Eskom debt, which may relieve the municipality of the lion’s share of the Eskom debt. Eskom has stopped levying interest on the principal debt. The municipality can procure operation and maintenance enablers to continue business as usual. We have embarked on vigorous credit control and debt collection, to help service debts that are in arrears and enhance continued service delivery.”
He said that the municipality’s institutional capacity has started to strengthen. “We have started to address the audit findings through the audit action plan to improve financial management credibility.
“Both the audit committee and the Municipal Public Accounts Committee (MPAC) are fully functional and support the work of the municipality. We have agreed to get support from the National Treasury about financial recovery.”
At the same time the municipality has applied for funding from the National Treasury to install smart prepaid meters and have finalised the evaluation roll, which will be implementable from 1 July this year,” he stated.
“About debt relief, the municipality is likely to save over R800 million over three years,” Sebolai concluded.
