Durban - The provincial treasury has come to the rescue of the Ulundi Municipality, which owed Eskom R41.4 million in non-payment of electricity as at the end of December.
The municipality led the province’s municipalities in owing the power utility a combined debt of R46.7m for more than 90 days.
Tabling the municipal budget for the second quarter of 2016-17 financial year, Finance MEC, Belinda Scott, said her department had since stepped in by establishing a task team to provide it support.
“A repayment plan was entered into whereby Eskom will no longer be charging interest as per the agreement between them and Ulundi Municipality.
“Provincial Treasury has closely monitored payments to Eskom on a monthly basis to ensure that the municipality adheres to its repayment plan,” Scott said in a report tabled in the legislature on Tuesday.
She also revealed that the municipality had defaulted on the repayment plan in June, July and September last year - a move that had resulted in the revision of the payment plan in February 2016.
No comment was obtained from the municipality as neither municipal manager Godfrey Zulu nor mayor Joane Manana could be reached.
But, Co-operative Governance and Traditional Affairs Department spokesman, Lennox Mabaso, blamed the situation the municipality found itself in on the economic downturn affecting the country.
Mabaso said the municipality was generating less revenue in the sale of electricity to consumers - some were unemployed - and that the free basic services funding for the indigent was proving inadequate.
He also said his department and the provincial treasury were obliged to provide support to those councils that faced challenges, hence the rescuing of Ulundi Municipality from having its electricity supply cut because of non-payment to Eskom.
The ANC has welcomed the provincial treasury’s move as the electricity cut would have resulted in the residents in the IFP-led municipality being on the receiving end.
“The IFP has no concern for ratepayers and has in the past years in almost all municipalities under it failed the toiling masses as its allegiance seems to be on the elite.
“There is no justification for such neglect of the poor; how can the municipality owe Eskom R41.4 million of the R46.7 million owed by all municipalities in overdue payments that have exceeded 90 days? We find it shameful and unethical,” deputy chief whip, Nontembeko Boyce, said.
Scott said KZN municipalities spent R5 billion (35.5%) of their capital budgets, which was significantly below the expected 50% projection expected at mid-year.
She also said all the province’s municipalities were owed R14.2bn as at December 2015, with R11.2bn (79.3%) in debts being more than 90 days old.
The MEC also noted with concern that municipalities did not comply with several financial reporting requirements as at February.
DA’s finance spokesman, Francois Rodgers, said it was disturbing that a number of municipalities did not comply with basic legislation.
“It begs the questions: why hasn’t provincial government intervened to hold mayors and executive councils accountable?” Rodgers said.
But Mabaso said KZN had seen a steady improvement in compliance with financial reporting and efforts being made by Cogta and the Treasury to ensure that there was compliance.
Daily News