Is the Council bankrupt?
Mayor says: “Despite all these daunting challenges and headaches, we should also indicate that we have made serious strides in our quest to turn the situation around.”
SECUNDA – The Govan Mbeki Municipality owes about R269 million to its creditors, including Eskom.
The financial statement tabled at the recent council meeting showed that the municipality is sinking into debt.
The statement revealed that the municipality still owes Eskom about R190 million.
Some of the other debt include:
* Dept of Community Safety and Security – R35 879 235-32
* Sasol Group Services – R7 487 092-87
* MGF (Pension Fund) – R6 853 931-89
* Samwu National Provident – R1 557 314-19
* Bonitas Medical Aid – R 961 513-40
* LA Health – R 945 4893-80
Delivering her speech, The Best of Times and the Worst of Times, at the council meeting last week, Ms Lindi Masina, executive mayor, said: “We are grappling with a plethora of challenges as an institution of government, challenges which are a result of the daunting economic complexities brought about by the yoyo nature of the capitalist system and its resultant outcomes.”
She said although Council is facing challenges, it is not all gloom and despair.
“Despite all these daunting challenges and headaches, we should also indicate that we have made serious strides in our quest to turn the situation around.
“The doomsayers will always want us to labour on our failures and by doing so, forget about the positive results that we have achieved and continue to achieve despite the horrible challenges that we face daily.”
Mr NC van Huyssteen, Democratic Alliance councillor, said: “So many times we have received these financial performance reports only to watch in awe as we slip deeper into the dark abyss of financial mismanagement.
“I think it is time that we should say to each other that our financial department is not capable of handling our finances.
“We, the DA, predict that we will reach a billion rand in outstanding debt before the election next year!
“To make matters even worse, we do not seem to be doing anything about this.
“We appoint new companies all the time to do debt collection, as we have received notice on our emails, but with no success.”
The outstanding creditors report raised eyebrows among residents who raised their concerns about especially Eskom.
They said it is unbelievable that the Eskom debt is still high.
“Where does our money go to?
“We were all happy that Council had reached an agreement with Eskom, but it looks as though the municipality is not honouring that agreement.
“Is the municipality bankrupt?
“Is it possible that we will have a dark festive season if Eskom cuts the power?” she asked.
Mr Bheki Kubheka, acting head of communication and marketing, said Eskom will not cut the electricity.
He said Council is not bankrupt, but its ability to honour the agreement with Eskom is highly dependent on the community and business.
“They must pay their municipal rates and taxes.
“It is imperative for the community to understand that 63 per cent of the municipal budget projection is based on service charges as per the consulted and approved budget.
Non realisation of this income negatively impacts the cash flow of the municipality.
“Community bills that are overdue by 60 days, 90 days and more are highly affecting the municipality’s ability to generate revenue and negatively impact the cash flow.
“This is why the municipality appointed a debt collecting company for the purpose of ensuring that it collects money from consumers.
“This will help the municipality to honour its agreement with Eskom and other service providers.”
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