Local newsMunicipalNews

‘Metro has one foot in grave’

The finance department report stated that while the municipality’s cash and cash equivalent improved from a negative R108-million in February to a positive R471-million in March, this was not sufficient to repay metro’s outstanding creditors.

If the Tshwane metro’s financial status deteriorates further, it would have to reduce its spending, yet again, the finance department has recommended.

The department’s financial management report tabled at council last week left councillors unhappy about the municipality’s finances.

The report stated that while the municipality’s cash and cash equivalents improved from a negative R108-million in February to a positive R471-million in March, this was not sufficient to repay outstanding debt.

“The metro has experienced a decline in collections, which contributed to its cash reserves dropping,” the report read.

ALSO READ: Eskom puts pressure on Tshwane metro to pay R878 million debt

The department emphasised that the revenue collection – municipality’s cash-flow – continues to be under strain that by March the metro had an “unfavourable” R856.4-million in revenue.

It said this was not enough and that poor collection of property rates, electricity, water and sanitation bills as well as fines issued by the metro police accounted for the majority of the low revenue collection.

In the 2020/21 financial year, the metro was among the 28% of municipalities the Auditor-General indicated were in a dire financial position. The AG noted that Tshwane has been in trouble over the past three years.

The municipality hopes that the installation of prepaid meters, migration of large power users to prepayment and intensified debt collection would improve the its finances. Last month, it resumed its aggressive revenue collection campaign to recoup about R17-billion the residents owed to it.

The cash and short-term investments by end March were R305-million while the bank overdraft was R220-million.

ALSO READ: Tshwane cut-offs to non-paying consumers saves the municipality from being cash-strapped

The unhappy councillors lambasted the metro for its financial position.

EFF council chief whip Leofi Leshabana said the report had several questionable figures, “for instance the R20.1-million spent on Covid-19 expenditure by March 31”.

“One wonders what exactly was this money spent on and many other related figures that are questionable,” he said.

According to the report, the Covid-19 spending is attributed to temporary personnel hired for Covid-19 activities and the procurement of cleaning material for public counters and screens. The metro spent R706-million on repairs and maintenance instead of R955-million in the budget.

Republican Conference councillor Lex Middelberg said: “It is clear from this report that the City has one foot in the grave and the other on a banana peel. So dire is the situation that the executive has stopped all meaningful expenditure on repairs and maintenance.”

He said underspending negatively affected service delivery to residents.

“The metro underspent by half a billion rand. The lion share of this is savings on maintenance and repairs. None of this is actually savings, it is rather a cynical short-changing of our citizens on service delivery that they pay for,” he said.

He said with all the underspending he anticipated that the municipality would have enough cash, “but we [metro] are not even sure we can pay current creditors”.

Middelberg said he was not too confident that the municipality’s aggressive revenue collection campaign would save it from being cash-strapped.

“The economy is in a tailspin… most people find our rates and services unaffordable. We need to bring our pay-roll under control; this will save us at least a billion rand on expenditure,” Middelberg said.

ALSO READ: Auditor General Report: Tshwane finances remain unstable and worrisome, three years on

ANC councillor Mpho Liwele said the report depicted a number of revenue shortfalls, and that “the municipality is not doing enough to ensure that revenue is collected”.

The municipality underspent by R451-million on its operating expenditure.

“Consistent underspending while service delivery across the city is deteriorating is not something that the ANC caucus is going to accept. Our people are suffering while there is no change in spending patterns.”

The report was referred to the municipal public accounts committee (MPAC) for further scrutiny, a move supported by mayor Randall Williams.

ALSO READ: SOCA | Electricity substation challenges and unstable finances remain top of Tshwane metro’s plans, says mayor

ALSO READ; Metro raises awareness of free services in Soshanguve


Do you have more information about the story?

Please send us an email to editorial@rekord.co.za or phone us on 083 625 4114.

For free breaking and community news, visit Rekord’s websites: Rekord East

For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram

Back to top button