Read more
Water boards in four provinces are owed a combined R17.7 billion while municipalities have not been paying pension fund contributions.
Image for illustrative purposes. Picture: iStock
Municipalities with poor payment records are risking a backlash from National Treasury.
A letter was recently sent to Minister of Cooperative Governance and Traditional Affairs (Cogta) Velenkosini Hlabisa, warning that vital payments to municipalities would be throttled should they not get their accounts in order.
Almost 40 municipalities were flagged by Treasury for owing water boards billions, as well as not honouring pension fund and medical aid payments of staff.
Defaulting municipalities
Finance Minister Enoch Godongwana wrote to Hlabisa on 30 June, giving the Cogta minister seven days to acknowledge the treasury’s demands.
Godongwana threatened to invoke section 216(2) of the constitution, which would place restrictions on Local Government Equitable Share (LGES) grant payments.
A total of 39 municipalities are in the finance minister’s crosshairs, including eight that owe the South African Revenue Service (Sars) a combined R197.5 million.
Those eight and a further 13 have unpaid third-party pension fund contributions amounting to R819.5 million.
The worst offender is Kopanong Local Municipality with R330 million in unpaid pension contributions, followed by Mafube and Mohokare municipalities with R253.4 million and R147.9 million, respectively.
All three fall under the Free State government, which has been accused of prioritising “exorbitant” salaries over service delivery.
“Withholding funds from struggling municipalities is not enough. All three levels of government have a responsibility to ensure that residents’ rights are protected,” stated the Freedom Front Plus’ Armand Cloete.
Over R17 billion owed for water
Unpaid pension fund contributions were dwarfed by the amount owed by municipalities to water boards.
Treasury singled out 18 municipalities from four water boards, which have a combined debt of R17.7 billion.
Matjhabeng Local Municipality — also in the Free State — has amassed a bill of R8.1 billion, while Merafong and Emfuleni municipalities in Gauteng each have debts exceeding R1 billion.
The municipalities must provide Godongwana with proof that the amounts will be settled or face receiving only partial LGES payments, which will be earmarked solely for the debts owed.
The finance minister warned that should those conditions not be met, he would motivate to Parliament for the cessation of all LGES payments to these defaulting municipalities.
Hlabisa’s office did not respond to requests for additional information, but Cogta’s Free State office did acknowledge questions sent by The Citizen, with that response still pending at the time of publication.
NOW READ: When is the deadline to register for free basic electricity?
