Municipality’s supplier-accounts have skyrocketed

MBOMBELA – The City’s financial management report for the first quarter of 2019/20 (July to September 2019) indicated that the trade payables at the end of September stood at R1 073 billion.

The City’s annual financial statements for the year ending June 30 states the amount owing at R1,7 billion.

“The Mayoral Committee Report presented to council on November 19 stated that creditors will be reduced to R1,4 billion by end October,” ward counsellor Sanley van der Merwe said.

It would seem the amount owed to the City’s creditors has further increased. A source inside the municipality has revealed to Lowvelder that the current figure could be closer to R2 billion.

Linda Grimbeek, head of operations of Kruger Lowveld Chamber of Business and Tourism (KLCBT), said it is no secret that the municipality has cash-flow problems.

“If businesses that deal with the municipality encounter any problems with the payment of their accounts, they can make arrangements with the municipal manager for a payment plan to be discussed, and if that does not succeed, they can approach the KLCBT to act as a mediator between businesses and the City, but we cannot make any promises,” Grimbeek said.

December brought relief to some businesses who received up to four payments at the beginning of the month.

“They owed us R180 000 at the end of August and only made a small payment in October. The account is now almost settled, with only R1 338 outstanding,” said Shawn Erasmus, branch manager at Voltex SA.

It not clear where the money is coming from, as Cllr Van der Merwe explained at the ordinary council meeting on November 28.

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She is concerned about the below-expected collection rate by the municipality and to make matters worse, “the R112 million the municipality will receive from National Treasury in December is going to Eskom. How will the City back its commitments made in terms of the budget plan and from which funds?”

In the municipality’s Report on the Reduction of Creditors (RRC), also tabled to council on November 28, it was stated that, “the City is implementing cost-saving measures by reducing contracted services and ensuring that outsourced services are insourced, in accordance with the Municipal Cost Containment Regulations”.

“The City hopes to receive the R132 million owed to us by organs of state, including the Department of Public Works, who have promised to pay, and we expect to save another R150 million by introducing cost-curtailment measures,” executive mayor Sibusiso Mathonsi stated during the council meeting.

But not all businesses were lucky enough to have their accounts settled.

Renate Scholle, the Riverside Park Precinct Association manager, spoke openly about the CMLM’s complete disregard for their statements of account, some of which have been outstanding since November 2017. The City’s RRC reflected an amount of R10 109 934 due to the institution.

“A payment arrangement will be requested from the service provider in order to service the debt,” read the remedial action suggested on the report.

“We have not received anything on the amount indicated, save for the four payments in April and May for the months of August to November 2017. The amount now outstanding is R11,2 million and no payment plan has been arranged with us,” Scholle said.

She said attempts to discuss repayment options with the municipality had been futile. The services rendered include security, surveillance, maintenance, beautification and cleaning services.

“We had a meeting with the previous municipal manager and he tried everything he could, but he could not come up with a solid solution,” Scholle concluded.

Municipal spokesman Joseph Ngala had not responded to Lowvelder’s questions at the time of going to press.

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