Van Rooyen takes tough stance on municipal debt

CO-OPERATIVE Governance Minister Des van Rooyen is cracking down on the rising municipal debt, after it shot up to R117 billion.

Van Rooyen said yesterday they have a task team working to bring down the debt significantly.

He said they were also in discussions with departments who owe municipalities a total of R5.4bn. Most of the debt is from households, who owe more than R62bn, followed by businesses with a debt of R28bn and government departments owing municipalities R5.4bn.

He said arrangements had been made with Eskom, but municipalities had defaulted because of unrealistic payment arrangements. He said municipalities wanted to settle the Eskom debt from their equitable share.

However, this was not the correct way to do it, he said.

Van Rooyen said municipalities owe Eskom R9.5bn.

“The work of the national task team on government debt is making progress in resolving the historical debt and government departments have made commitments to adhere to their current debt.” He said national departments owe municipalities R2.3bn and provincial departments owe municipalities R3.1bn.

But the DA attacked Van Rooyen during the debate in the House on his budget, saying municipalities were crumbling.

Kevin Mileham of the DA said since the launch of the back-tobasics programme three years ago no assessment has been conducted on the delivery of municipalities. But a report from one of the institutions, which was released last week, has painted a dysfunctional municipal system.

The report found that 86% of the municipalities were not viable. Mileham said 205 municipalities relied on conditional grants from National Treasury for their survival.

He said this was not sustainable as municipalities have to generate their own revenue.