Four municipalities on the brink of collapse
FOUR municipalities in the Free State are on the brink of collapse, Cooperative Governance and Traditional Affairs Minister Des van Rooyen has said.
Van Rooyen said the department would ensure that the four municipalities were not rendered dysfunctional.
He said a number of municipalities in the Free State were facing serious financial challenges because of a lack of governance and administrative capacity.
The minister was speaking at the President Hotel in Bloemfontein after meeting with officials to assess the state of the municipalities.
The Maluti-a-Phofung, Mafube, Matjhabeng and Masilonyana municipalities were a point of discussion as they face serious financial challenges.
He said the problem in the four municipalities was that they did not have a strong revenue base.
“The financial challenges that are encountered by these municipalities to a large extent has led to a situation where some of these municipalities are unable to pay the salaries and creditors,” Van Rooyen said.
He said vacancies in senior management was the other problem that fuelled the challenges.
He said municipalities like Mafube were facing deeper challenges because it did not have a solid economic base from which it could expect generation of solid revenue
He said his department would on a quarterly basis monitor the progress made by the municipalities.
Van Rooyen said the department was going to develop a recovery plan to make sure that the municipalities sustained themselves.
He said the four municipalities were struggling to make ends meet economically.
“At present, several municipalities are struggling to operate and maintain their service infrastructure in a costeffective and sustainable manner and this is a serious problem that we need to deal with extensively.”
He said they had since realised that the issue of leadership also played a critical role in accelerating the problems faced.
He said the South African Local Government Association would also form part of discussions.
On the issue of municipalities owing Eskom millions of rand, Van Rooyen said they were working around the clock to come up with solutions.
He said it would be important for municipalities to be proactive and adjust the pricing models for distribution of energy to their consumers within their licensed area.
“A large capital investment in power utilities by municipalities needs to be looked after through proper maintenance and care taken of these installations.”
The other problem that municipalities encounter is the high interest fee the municipalities are paying to Eskom and unpaid rates by the communities.
“The municipalities pay 50% of the actual fee, the other 50% is for interest charged by Eskom and that has caused the bill to be so high.”
CHALLENGES: Cooperate Governance and Traditional Affairs Minister Des van Rooyen and MEC Sisi Ntombela attended a session to assess state of priority municipalities at the President Hotel in Bloemfontein.