City still in financial woes despite efforts to collect revenue
Addressing the council, Clr Nqebalethu Tshabalala said the shortfall was largely because of the revenue that was supposed to be collected from the sale of electricity.
Despite efforts to improve the city’s finances through revenue collection and other means, the City of Ekurhuleni (CoE) still needs money.
The city has fallen R2bn billion short of the R18.3bn in revenue expected to receive for the 2024/25 financial year.
This loss was revealed in last week’s council meeting.
The loss is blamed on the low revenue collection rates of R16.3bn.
Addressing the council, Clr Nqebalethu Tshabalala said the shortfall was largely because of the revenue that was supposed to be collected from the sale of electricity.
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“Illegal connections and consequent loss of revenue from the sale of electricity are the main contributors to the shortfall. At the closing of the previous financial year, there were 119 informal settlements.
“We now have 163 informal settlements illegally connected to the grid. The missing R2bn can be traced to that,” said Tshabalala.
ActionSA’s Michael Basch said collection rates were 82.22% out of the 90% needed.
“We warned mayor Nkosindiphile Xhakaza this would be a problem when adopting this budget.
“This affects cash on hand down to 11 days out of the 25 required. This, in turn, affects our interest from receivables, which is down by a staggering 80%,” said Basch.
He added efforts to get residents to pay will not yield fruits.
“Residents are not paying because they are getting less and being made to pay more.
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“When you consider the ageing and failing infrastructure and the consistent power and water outages across the city, why would people want to pay?”
Nkululeko Dunga from the EFF said a shortfall of R2bn means the city now has an unfunded budget.
“The low collection rate is because of non-billing and inconsistent revenue collections. The ANC-led government failed to manage the finances of the city.
“Truth be told, the money is missing and spent; the people of informal settlements were not part of it,” said Dunga.
Informal settlement and illegal connections contributed to the city’s financial woes. Ward 92 Clr Kade Guerreiro raised the Elandfontein Mabondeni informal settlements waiting for housing and relocation.
“Residents of Mabondeni have issues with lack of service and living on the wetland.
“When will Mabondeni be relocated; when will the department remove illegal connections at the settlement and provide stable power; what is the total number of houses in the settlement and what is the total cost of relocating the settlement and rehabilitation of the municipality infrastructure damaged because of the settlement? asked Guerreiro.
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MMC for Human Settlement Kgopelo Hollo said,” The removal of illegal connections required all the relevant departments to plan on a day that will be discreet,” said Hollo.
About the number of households, he said the city does not have the exact numbers.
“On the relocation and rehabilitation a feasibility study will have to be conducted,” said Hollo.
