Groups join to take on Makana

THREE Grahamstown civil society organisations yesterday demanded that the broke Makana municipality be put back under administration.

The Grahamstown Residents’ Association, Grahamstown Business Forum and Makana Unity League also called on national government to provide funding to assist the financially insolvent municipality at a time when severe drought is likely to see the city run dry and a R55-million Eskom debt may result in the bulk electricity supply being cut.

The three organisations have formed a committee for the purpose of driving the project, according to a press release from Grahamstownbased attorney firm Wheeldon, Rushmere & Cole.

In a letter delivered to the office of Makana mayor Nomhle Gaga and acting municipal manager Mandisi Planga, the committee chairman, Ron Weissenberg, said the letter was written out of concern and not to apportion blame.

A special council meeting in late June exposed the dire state of the municipality’s financial affairs.

It owes creditors more than R146million which it does not have, and the municipality is itself owed some R366million it cannot collect.

An inadequate rates collection means its deficit is growing by R5million a month and 80% of its income is spent on salaries and servicing debts.

Its overtime – which stands at R5million a year – is more than double the R2.1-million budgeted.

According to the letter, reports showed that while the municipality collected some R9-million in May in electricity payments, it passed just R750 000 to Eskom. This amounted to misappropriation, said Weissenberg.

The diversion of these funds had happened at a time when Eskom was threatening to cut the city’s electricity on the eve of the National Arts Festival.

A last-minute agreement between the municipality and Eskom avoided this inevitability.

“It is clear from the report and other reports of your committees that Makana municipality is not only in serious financial difficulty and is in fact insolvent,” said the letter.

“You and your municipality have clearly admitted that it is unable to perform its constitutional obligations due to the crisis in its financial affairs and is clearly in breach to provide services, or meet its financial obligations.”

The letter sets out how the financial crisis had created enormous problems for management of the municipal rubbish dump, fire services and traffic services, among others.

It has given the municipality seven days to “submit” to administration or the committee said it would take the matter to Treasury, the premier’s office and cooperative governance and traditional affairs (Cogta) MEC Fikile Xasa.

The committee said it wanted a copy of the letter the municipality had written to Cogta asking for a R47million bailout.

Makana municipality had not commented at the time of writing.