Cri­sis sta­tions

... as EMLM fi­nan­cial sta­tus re­port to be sent to MEC

The Rep - - FRONT PAGE - ANDISA BONANI

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

Pic­ture: THE HER­ALD

IN AN­TIC­I­PA­TION: Co­op­er­a­tive Gov­er­nance and Tra­di­tional Af­fairs MEC Fik­ile Xasa is to be given a re­port on the fi­nan­cial state of af­fairs of the Enoch Mgi­jima Lo­cal Mu­nic­i­pal­ity

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