News24 Wire
Wire Service
2 minute read
16 Feb 2021
5:38 pm

R34m debt owed to ‘broke’ Amathole municipality by government

News24 Wire

The municipality was placed under administration after it announced that it would not be able to pay the salaries of its 1,670 workers for four months.

Picture: iStock

The broke Amathole District Municipality (ADM) – which has been placed under administration after going bankrupt – is owed R34 million by government and organs of states for municipal services.

The Eastern Cape Department of Education is the worst debtor, owing R8 million, followed by the provincial public works department with R5.9 million.

A large portion of the debt owed to the rural municipality is more than five years old, the municipality announced on Tuesday.

When including debt owed by businesses and households, the figure shoots up to a staggering R1.5 billion.

Notably, there has been an increase in the non-payment of services by consumers, businesses and government departments, ADM Mayor Khanyile Maneli said.

He said non-payment of services by businesses and government departments was a grave concern as the municipality required capital to treat water to ensure quality production of the scarce resource.

Government departments and organs of state owing the Amathole District Municipality:

  • Eastern Cape Rural Development Agency: R286 000
  • Parliamentary offices: R2.5 million
  • Department of Education: R8 million
  • Institutions of higher learning: R363 351
  • Correctional services: R1.8 million
  • Public clinics: R1.7 million
  • Agriculture: R202 510Public works (provincial): R5.9 million
  • Public works (national): R3 million
  • Eastern Cape Development Corporation: R3.9 million
  • Public hospitals: R5.4 million
  • Total: R34 million

“ADM has undertaken revenue enhancement mechanisms, and through inter-governmental relations processes letters have been written to the honourable premier and MECs for ensuring timely payment for services rendered.

“ADM is looking closely at the issue of indigent communities that use more than the legislated 6 kilolitres. We urge our communities to be responsible water users in order for us to preserve this scarce and precious resource,” Maneli said.

The district municipality, which is made up of six local municipalities, was placed under administration after it announced that it would not be able to pay the salaries of its 1,670 workers for four months.

It admitted that the salary bill of R65 million per month and poor revenue collection had sunk it deeper into a financial sinkhole.

While the municipality cited an unaffordable salary bill due to a bloated organogram as one of the causes of its financial crisis, the SA Municipal Workers’ Union said maladministration, financial mismanagement, wasteful and fruitless expenditure and outsourcing of contracts were the causes.

For more news your way, download The Citizen’s app for iOS and Android.