Municipality debt at R135mComment on this story
Government departments in the Western Cape owe municipalities more than R135 million for rates and services, the provincial Treasury has revealed.
In a written response to the legislature, Finance and Economic Development MEC Alan Winde said R135.27m was owed to municipalities across the province by national and provincial government departments as of April 30.
The biggest defaulter is the national Public Works Department, which owed municipalities R39.95m, followed by schools under the provincial Education Department, owing R31.32m.
Winde said that although the overall figure was still considerably high, the Western Cape government had cut debt owed to municipalities by more than 50 percent over the past two years.
He said nearly 80 percent of the total outstanding debt (R106.92m) was owed to the City of Cape Town, while R28.35m was owed to municipalities outside the metro. R38.86m of the debt owed to the city was being disputed and almost R34m had been owed to the council for more than 60 days.
In 2010, national and provincial government departments in the Western Cape owed municipalities R306.38m.
“We’ve made massive strides in terms of sorting out debt owed to municipalities in the last two years,” Winde said. “When the DA came into government in the Western Cape, this was one of the first things we tackled head-on. At the time, we owed municipalities hundreds of millions of rand.”
Winde said the provincial Treasury had a dedicated debt management task team, which was established between the provincial government and the city to deal with resolutions of disputes and the consequent payment of outstanding accounts.
“The reasons for the arrears in the outstanding debtors are mainly attributed to disputes in accounts, billing errors and also confirmation of ownership of properties.”
City spokeswoman Kylie Hatton said government departments which owed the council for rates and services were treated like private household owners or businesses.
Winde said the provincial Treasury would continue facilitating the debt process between respective organs of state to resolve ostensible debt balances.
“Further task teams will be established in addition to the existing one, where the key departments are represented,” he said. “In addition, the one-on-one debt engagements with municipalities will continue where the highest debt balances per district will form the basis of the engagement.”
Demetri Qually, SA Local Government Association (Salga) provincial chairman, said debt owed to municipalities by government departments was a “major problem” .
“It is definitely a matter of concern and presents problems to municipalities and their budgeting,” Qually said. “We have taken this matter up with the national Department of Co-operative Governance and Traditional Affairs.”