EMLM, Milowo shake hands on R7m arrears

Municipality averts sale of assets to settle debt

MILOWO Trading Enterprise and Enoch Mgijima Local Municipality (EMLM) have entered into an agreement where the local authority would pay R7m before July 27 to avoid a second round of sale of municipal assets.

This comes after the local authority elected a multi-party committee last week that would re-open negotiations with Milowo to have the outstanding debt of R14.2m paid to the engineering company.

The committee was also tasked to look into who had signed a settlement agreement with the company that required the municipality to pay an amount of R7m over three months starting in October last year.

The Rep reported (“Committee to probe huge debt problem” July 13) that EMLM mayor Sisisi Tolashe indicated that consequence management would be the best tool it could use to deal with individuals who were responsible for the situation in which the municipality had found itself.

ANC councillor Mhlangabezi Mangcotywa, speaking on behalf of the newly-elected committee, said during a special council meeting on Monday that after talks with attorneys representing Milowo, it had been agreed by the parties to pay R7m – with R2m to be paid in monthly instalments until the debt was cleared.

“I also want to indicate that we will pay this money in protest and not because we owe the company anything. Reports have been tabled which state we do not owe Milowo anything, but because we are a law-abiding council, we will pay because that is what the court has instructed. At this stage we are waiting for the Milowo attorneys to sign the proposal which we agreed upon so that the payment can be made.” EMLM municipal manager Chris Magwangqana said based on the writ of execution by the Grahamstown High Court, the municipality still had to pay R14.2m to Milowo.

“There are still legal and administrative costs that we need to pay, but the actual debt will be paid by the end of business today [Monday]. The Milowo and Eskom debts have placed the municipality in great depression and it is a relief we are able pay them so we can focus on service delivery which is paramount to our commitments for EMLM residents [sic].”

The attorney representing Milowo, Brin Brody of Wheeldon, Rushmere and Cole confirmed the proposal and agreement from EMLM and that R14m had been paid.

The crisis concerns an amount of R21m EMLM owed Milowo for a hall built in Sterkstroom in 2012, when the property fell under the former Nkwanca Municipality.

Last month the Komani sheriff auctioned municipal assets in a bid to recover the debt, but only managed to accumulate R6.5m from the auction.

EMLM mayor Sisisi Tolashe said she was proud of the work done by the committee which put aside political differences in order to deal with the pressing issue that affected everyone.