On Monday, Gauteng MEC of human settlements, urban planning, and cooperative governance and traditional affairs Lebogang Maile announced that Gauteng municipalities were owed R90.4 billion over three months.Maile was briefing the media on the state of municipalities in Gauteng and said most of this amount was owed by household consumers at R70.3 billion, followed by businesses at R20.1 billion.
“Although municipalities reported surpluses, revenue performance remains a challenge due to uncollectable old debt. Vigorous implementation of credit control policies and debt management policies is critical to improving the status. The financial constraints in municipalities affect the timeous payment of creditors within 30 days of invoicing, especially big creditors, such as Eskom and Rand Water. The municipal accounts, therefore, attract fruitless and wasteful expenditure due to interest on late or non-payment,” Maile said.
The total for unauthorised, irregular, fruitless and wasteful expenditure for the 2020/21 financial year was recorded at R23.62 billion, a decrease of R14.28 billion from the 2019/20 financial year, for which the figure was R37.86 billion.
He added that over R593 million of the R23.62 billion was addressed by municipalities in the 2020/21 financial year.
The highest of the 2020/21 wasteful expenditure culprits were the City of Johannesburg and the City of Tshwane at R
16.62 billion and R13.39 billion, respectively.
“The City of Ekurhuleni, Merafong and Midvaal did not incur unauthorised expenditure in the 2020/21 financial year,” he said.
The outstanding amount owed to Eskom by Gauteng municipalities had increased from R9.49 billion to R9.75 billion as of April 13 with only three municipalities – City of Ekurhuleni, Lesedi and Midvaal –reporting no overdue accounts.
“Merafong continues to make payments weekly to address the outstanding debt owed to Eskom, the municipality has proposed a new payment plan just recently. Rand West meets weekly with Eskom, Gauteng provincial treasury and Cogta on its outstanding debt.”
Maile said, according to Rand Water, at the last count, the outstanding amount owed by municipalities had increased from R2.94 billion to R3.15 billion, with the City of Johannesburg and Midvaal reported to have only current accounts.
He said the outstanding amount owed by Gauteng government departments to municipalities for rates and services was R449 million.
“A debt management committee has been created to facilitate a process of resolving government debt as an inter-governmental relations intervention between the various spheres,” Maile said.
“The committee has managed to facilitate payments to municipalities amounting to R12.9 billion, with the biggest beneficiary being the City of Johannesburg at R5.6 billion, followed by the City of Tshwane at R3.3 billion,” he said.
Maile said Cogta was assisting with integrated revenue enhancement strategies for each municipality, with the strategies focusing on the need for municipalities to concentrate on an integrated revenue value chain.
“This approach recognises that various functions, namely spatial and town planning, property valuation and billing are all interrelated and have to be dealt with in an integrated way.
“Cogta is in the process of developing municipal viability strategies, tailored for each municipality to develop an intervention aimed at setting them on a trajectory of sustained growth and viability,” he mentioned.
Maile added that there were high electricity losses around the province due to illegal connections, bypassed meters, destruction of underground electrical infrastructure and non-maintenance of electricity infrastructure.
“Most of these losses can be curtailed with the cooperation of communities and behavioural changes as, when they partner with government, it ensures that infrastructure that is meant for service delivery within communities is protected and taken care of.”