National Treasury to withhold municipalities’ equitable shares
According to the National Treasury these municipalities have persistently failed to pay Eskom and other creditors on time.
The Lekwa Municipality’s failure to meet their financial obligations had a ripple effect.
The National Treasury has announced that is has from 20 March withheld equitable share contributions to 60 municipalities.
Lekwa is the fifth municipality on this list.
According to the National Treasury these municipalities have persistently failed to pay Eskom and other creditors on time.
The Treasury will also support the cutting of electricity supply to national and provincial departments that fail to pay their municipal bills on time.
Equitable shares are funds given to municipalities unconditionally from revenue collected nationally.
It is calculated taking into account the functions assigned to the particular municipality and its ability to raise funds on its own.
Many smaller municipalities are reliant on these funds as their economic base does not support much revenue from its own sources.
Treasury said in a statement that municipalities owed Eskom R9-billion at the end of 2014, half of which was current and the other half in arrears.
They also owed water boards R3,6-billion, of which R1,3-billion was current and R2,3-billion in arrears.
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