INKOSI Langalibalele Municipality in Estcourt has financial problems, but the mayor insists that things are improving.

INKOSI Langalibalele Municipality in Estcourt is in danger of being placed under administration due to financial difficulties, opposition parties in the council say.

However, mayor Jabulile Mbhele, while admitting that the municipality had significant financial problems, said improvements were being made and there was no immediate danger of it being placed under administration.

The municipality was established after the amalgamation of Imbabazane and Estcourt municipalities, after the local government elections last year.

Fears that it was in serious financial trouble were raised on Monday after several vehicles were taken away by the supplier.

But Mbhele said the rental contract with the vehicles’ supplier was terminated as part of “cost cutting measures”.

“When we took over this council, there was no money, the chief financial officer had resigned so we could not even get an explanation on what happened. In our first week Eskom was coming to turn off the power due to non-payment.

“There is a team from the provincial government assisting us and the situation has improved since then,” she said.

IFP councillor and exco member, Mziwandile Majola, said there was a real danger of the municipality going under administration.

“There was a time when we did not pay Eskom for three  months. When the two municipalities were amalgamated, a lot of financial problems emerged. Imbabazane was forced to pay close to R17.5 million after they were sued by employees for unfair dismissals and Estcourt was forced to hire close to a hundred workers permanently at different levels, something they had not budgeted for,” he said.

DA councillor, Pertus Gericke, said the municipality owed millions and warned that could be just the tip of the iceberg. “I can only speak on the last financials of June, as those were the last ones I saw. We owed suppliers around R80 million, some of the suppliers have not been paid for 180 days. 

“We also owed Eskom around R22 million. We are in financial difficulty, there could be more as there are some expenses that are not in the reports that the officials do not even tell us about,” he said.