The Democratic Alliance in Mpumalanga (DA) has written to CoGTA MEC, Ms Busisiwe Shiba, to summon Govan Mbeki Municipality to present an action plan to the committee of Cooperative
Governance and Traditional Affairs Department detailing on how are they going to improve revenue generation and the subsequent payment of their Eskom account.
The DA said over the past few years, Eskom debt in this municipality has escalated exponentially as it failed systematically and repeatedly with all aspects of revenue generation, debt collection, and the timeous payment of creditors.
The municipality’s annual budget is now less than their debt to creditors – meaning that they are effectively bankrupt.
“For October 2021, Govan Mbeki Municipality owed their creditors more than R3b, and this is made up of R2.6b being owed to Eskom and R439m being owed to Rand Water.
“The exponential increases in the debt to external entities can never be acceptable because it is the large debt and the exorbitant interest which inevitably leads to much needed service delivery being diminished to a point where no services can be rendered,” said Ms Trudie Grové-Morgan, DA Member of Mpumalanga Legislature.
“The section 71 report further revealed that Govan Mbeki Municipality had a payment rate of 58%, and that R2.7b was owed to the municipality for services provided.
“The information provided reiterates that the financial spiral in which this municipality is, is due to an inability to capitalise on services provided because of high distribution losses and because of incorrect revenue generation strategies.
“This can never be allowed to continue, hence the DA’s request to the MEC to intervene by summoning the municipality to come to the committee of CoGTA to present detailed plans on how it is going to improve revenue generation and the subsequent payment to Eskom,” said Ms Grové-Morgan.
