Crisis stations
... as EMLM financial status report to be sent to MEC
ENOCH Mgijima Local Municipality (EMLM) may not be able to pay Eskom – and is running the risk of not being able to pay salaries at the end of the month – due to its current financial state.
The validity of a financial report, of which the author is not known and which was leaked to the media, which details the current financial challenges faced by the local authority, was acknowledged by EMLM executive mayor Lindiwe Gunuza-Nkwentsha during a crisis meeting called by concerned business owners on Monday.
The report indicates that EMLM had R4.25-million in its bank account as of October 6.
The salary bill, due by October 25, is R24.6-million while a whopping R40.8-million is owed to Eskom. The total due to Eskom includes interest of R503813 incurred in September when the municipality paid only R16-million of a R31-million bill.
The meeting was attended by various business people, chaired by Ken Clark and Enoch Mgijima Local Municipality (EMLM) officials, including Gunuza-Nkwentsha and various other government stakeholders.
Gunuza-Nkwentsha said she did not know how the financial report tabled at the meeting had been made public but that it was a true reflection of the current status of the municipality.
“The municipality currently does not have money and it is difficult for us to pay creditors. One of the main issues are [the] strikes, they hinder us from collecting money that is owed to us and we therefore struggle to pay our bills.
“The issue of instability within the municipality is also a huge problem – we have no full-time management starting from the municipal manager.”
The report indicated that from July to September this year, only R25.8-million was collected by municipality which fell short of the expected R68.5-million.
Clark said he had not received his electricity bill in two months and would be happy to pay the money that would amount to millions because it would help to relieve the Eskom debt.
Acting municipal manager Mzoxolo Dingani said he wanted to acknowledge that the municipality did have problems and that they were doing everything to ensure that the current situation was addressed.
“We want permanent solutions for all the issues. On the issue of staffing, the position of municipal manager has already been advertised and we will follow up on the appointments of the CFO and other director positions to ensure that the municipality is stable.
“We need to ensure that the businesses are booming in Komani as they contribute significantly to its economy and the employment of its residents.”
Clark said the core of the municipality needed to function properly and that people with the suitable capacity should be appointed to uphold the mandate of the municipality which is to serve its people. The regular collection of revenue owed to the municipality was imperative to allow it to pay its bills.
“We need the revenue collection to exceed the monthly expenditure of the municipality as it should. If this does not happen, we will have meetings like these again and talk about the same things without a resolution. It is imperative that the senior people within the municipality are able to hold their officials accountable.”
Consultant Peter Bezuidenhout who was tasked by the municipality to evaluate its electrical accounts, said the municipality’s Eskom bill was of concern and that if the municipality did not settle its bill by October 26, Eskom would issue a 14-day notice for the payment to be made. Load-shedding would be next to follow.
A Cooperative Governance and Traditional Affairs (Cogta) representative, who would not give her name, said the situation was embarrassing because, while government was trying to sort out the issues of other municipalities, they were not aware of EMLM’s problems.
“While provincial government is currently engaging Eskom on behalf of other municipalities, this particular municipality did not come out as having challenges,” she said.
“I know for a fact that the Cogta MEC [Fikile Xasa] said there would be no bailouts for municipalities – but when there is a crisis such as this, discussions take place and a resolution is taken. As Cogta, we did not know that EMLM problems are of this magnitude.”
She suggested that a task team made up of various stakeholders in the meeting was appointed.
“Our job is to monitor municipalities and accept reports, but I must say some of the reports we’ve received from the mayor were deceiving because the reports that were tabled to the MEC a month ago when he came to this municipality, did not reflect this kind of a crisis. We need to be truthful on behalf of the communities and local businesses.”
It was decided that the task team would look into the issues of electricity within the municipality and that it would ensure that a certain amount of money be paid to Eskom before the end of the month.
The media was asked to step out while the stakeholders continued the meeting and set up a task team. It was decided that the present Cogta representatives would write a report to the MEC to alert him about the situation in EMLM.
At the time of going to press, The Rep had not yet been informed as to who would be serving on the task team.
The salary bill is R24.6-million while a whopping R40.8-million is owed to Eskom