Funds dry up for waterworks
Several water projects in Dr Ruth Segomotsi Mompati district municipality in North West have been suspended due to a lack of funds. Minister of Cooperative Governance and Traditional Affairs Zweli Mkhize said this was because the municipality could not meet its service delivery obligations after reportedly investing R150 million in VBS Mutual Bank, which has been put under curatorship.
“The municipality invested conditional grants and much of the regional bulk infrastructure grant for the current financial year was not received,” he added.
The municipality has managed to pay monthly operational expenditure, but struggled to pay the Sedibeng Water Board.
The municipality’s water invoice stands at R20 million as per a service level agreement with the water board. However, the municipality’s current financial duress makes paying that both unaffordable and unrealistic.
Mkhize also said the municipality could not pay its creditors within 30 days and, as a result Treasury was withholding funds from the municipality. The municipality had not yet developed a financial recovery plan.
It’s one of four North West municipalities that invested the most money in VBS Bank.
Behind this municipality was the Mahikeng local municipality, which reportedly invested over R83.4 million in the bank. The two other municipalities that invested in the bank are the Moretele local municipality, which invested R50.4 million, while the Madibeng local municipality had invested R31.5 million. – OFM News