Metro debt has a process

In her column, Carol Paton expresses her astonishment that no-one in the national cabinet is seized with the problem of municipal debt to Eskom, which is growing at a rate of R1bn per month (“State all at sea as no-one captains Eskom’s debt disaster”, March 9).

There is indeed a mechanism to deal with this crisis. It is described in section 139 (5) of the constitution, which mandates provincial governments to step in when local governments cannot pay their debts. The provinces must devise an appropriate recovery plan, which is binding on the indebted municipality.

The real questions Paton should ask is why the Western Cape is the only province that consistently fulfils this constitutional obligation, and why co-operative governance and traditional affairs minister Nkosazana Dlamini-Zuma has not acted against provinces that fail to do so.

In the Western Cape, no municipality is in arrears with its financial obligations to Eskom. This has not always been so. Under the ANC, Oudtshoorn built up a R100m debt to various service providers, including R57m to Eskom. Though this is peanuts compared to the R27bn reportedly owed by Soweto alone, it nevertheless necessitated the intervention of the provincial MEC, Anton Bredell, under section 139 (5).

An investigation commissioned by the province showed some startling problems, including poor budgeting, weak controls, significant skills shortages despite a top-heavy administration, high cost of employees and a budget burdened by a supernumerary army of about 600 low-skilled people on the payroll.

The turnaround strategy, which was binding on the municipality, involved the secondment of skilled staff in crucial positions funded by the provincial government, a skills audit, the curbing of fruitless and wasteful expenditure, and a reduction in supernumerary staff.

Within 100 days many smaller creditors had been repaid and a repayment plan had been entered into with Eskom. All nonessential expenditure was minimised, an oversight committee was established to implement strict expenditure control, and within a year the Eskom debt had been fully repaid.

This is what should be happening across SA where municipalities are not paying service providers. But the truth is, in many instances the provinces are as delinquent as the municipalities they are supposed to support and oversee.

DA federal council chair erstwhile Mbeki administration would not support such reforms, SA’s decline must be expected to continue.

Institute of Race Relations