GMM mayor tells of financial recovery plan
He said they are working with the provincial and national treasury, the Department of Cooperative Governance and Traditional Affairs (CogTA) and other stake holders, including Eskom, who are part of the municipal financial recovery committee that sits frequently.
HIGHVELD – Govan Mbeki Municicipality has again received a disclaimer audit opinion for the 2018/2019 financial year from the office of the Auditor General and was put under administration Section 139(1b).
“This (Section 139 (1b)) speaks about financial recovery,” said Govan Mbeki Municipality’ executive mayor, Mr Nhlakanipho Zuma.
Mr Zuma held a press briefing on the 22 January in the municipal auditorium.
He said they are working with the provincial and national treasury, the Department of Cooperative Governance and Traditional Affairs (CogTA) and other stake holders, including Eskom, who are part of the municipal financial recovery committee that sits frequently.
According to Mr Zuma, this financial recovery committee is tasked to look at the municipality’s cash flow and revenue enhancement initiatives and to prioritise the municipality’s budget from time to time.
Mr Zuma said the municipality’s service delivery challenges include the electricity crisis in eMbalenhle
There is not enough electricity capacity to supply the township, which has lead to riots and unrests in the past.
According to Mr Zuma public and private property were damaged and which caused more delays in the service delivery progress.
“We are moving gradually with Eskom. We have reached a repayment plan agreement and the council also adopted it. This is what Eskom was crying for all the time,” said Mr Zuma.
He believes the agreement with Eskom is feasible for both parties.
“Eskom committed to commission a new permanent transformer with a capacity of 20MVA. We are awaiting for the installation process to resume soon.”
Mr Zuma said the project aught to be completed within six months.
He predicts a strain in paying Eskom during the winter, because consumption will be higher.
The municipality is paying Eskom R52-million a month, but in winter this might escalate to R100-million a month due to electricity demand.
Mr Zuma said the municipality only increases tariffs per financial year not per the season as they are not controlled by the demand, but they follow legislations that govern the municipalities.
He is hopeful that they will meet Eskom demands during the winter.
“Eskom has reduced the Notified Maximum Demand (NMD) in the previous years in eMzinoni and Bethal, eMbalenhle and parts of Evander, resulting that the municipality is able to supply the required electricity to communities especially during peak hour and winter season.”
He said the municipality reached an agreement with Eskom to increase Notified Maximum Demand in Bethal and eMzinoni, but only if the municipality can pay extra to what has already been paid, which is R95-million for both the eMbalenhle transformer and Bethal and eMzinoni Notified Maximum Demand.
“The power utility also requested an extra R40-million rand for Bethal and eMzinoni’s Notified Maximum Demand,” said Mr Zuma.
Eskom will not increase Notified Maximum Demand for eMbalenhle because their infrastructure erodes the more it heat up and goes beyond its capacity.
“eMbalenhle has 37MVA that was reduced to 34MVA in the last two financial years, which is not sufficient,” said Mr Zuma.
He also believes that a 20MVA transformer that will be install at eMbalenhle (old bracken mine) will bring changes in the township’s electricity supply.
Mr Zuma also blamed the institution on changing transformers every month while according to him, the transformer life span is 10 years and more, but because they are overloading and burn, he said as the municipality needs to install new transformers and split the load in order for their transformers to last longer.
Mr Zuma said there is a strain between municipality and Rand Water, because Rand Water sometimes forget about the constitution.
He said they know that they owe Rand Water R355-million, but that does not give Rand Water a right to close water for communities because of interests that are accumulating due of late payment.
Mr Zuma said that the municipality is paying their account to Rand Water.
Ms Ciska Jordaan, DA caucus leader, said the Auditor General report is a true reflection of the havoc in Govan Mbeki Municipality and truly paints a grim picture of the mess in which the municipality finds itself.
“Despite the previous audit reports, it is disappointing but unsurprising that again our municipality has received a disclaimer of opinion and however shocking it was to hear, the CFO stated in January that the municipality is basically in the state of insolvency and should be liquidated,” said Ms Jordaan.
