City of Joburg re­futes chaos al­le­ga­tions

The Star Early Edition - - POLITICS - ANNA COX

AL­MOST 19% of the city’s R55 bil­lion bud­get has, over the past few years, been lost to cor­rup­tion.

So said the City of Joburg, while refuting al­le­ga­tions made by the ANC in Joburg over the week­end, in which the party an­nounced the DA-led coun­cil in Joburg is in fi­nan­cial trou­ble.

This press con­fer­ence fol­lowed a state­ment from the ANC last week an­nounc­ing that the mem­ber of the may­oral com­mit­tee (MMC) for fi­nance, Ra­belani Da­gada was about to be axed, a claim which the DA has de­nied.

The DA slammed the ANC, say­ing its com­ments were “noth­ing more than the ANC’s at­tempt at re­viv­ing former mayor, Parks Tau’s po­lit­i­cal ca­reer from the ashes.

“The truth of the mat­ter is that, un­der ANC ad­min­is­tra­tion, the city and its fi­nances were run in an en­vi­ron­ment of chaos and dis­or­der, all of which al­lowed a cul­ture of cor­rup­tion to fes­ter and flour­ish. The man­age­ment of the city’s fi­nances is a mat­ter of pub­lic in­ter­est and mem­bers of the pub­lic were wel­come to scru­ti­nise the city’s fi­nances,” he said.

“I would cau­tion that the city’s fi­nances should never be used as an in­stru­ment for petty pol­i­tics. Stake­hold­ers such as the au­di­tor-gen­eral, Na­tional Trea­sury and In­vestors City keep us hon­est, con­stantly advising us how to im­prove fi­nances,” he said.

Re­gard­ing the ANC’s ac­cu­sa­tions about rev­enue col­lec­tions, Da­gada said that, in terms of rev­enue col­lec­tion for the year 2016/17, the unau­dited num­bers show a sig­nif­i­cant re­duc­tion in the vari­ance be­tween the bud­geted and the ac­tual rev­enue col­lected com­pared to 2015/16.

“This is an im­prove­ment from R3.4bn neg­a­tive vari­ance of fi­nan­cial year 2015/16 to an im­proved R2.7bn neg­a­tive vari­ance for 2016/17. In March and June 2017, rev­enue col­lected ex­ceeded R3bn – a first in the City of Joburg, where rev­enue col­lec­tion ex­ceeded R3bn for two months.”

The to­tal rev­enue col­lec­tions in 2015/16 was R34.9bn ver­sus an im­proved col­lec­tion of R35.2bn in 2016/17.

Speak­ing of the 2017/18 bud­get, Da­gada said it was as­sessed by Na­tional Trea­sury, and it was found to be well-funded.

The billing cri­sis, said Da­gada, was never re­duced, but rather “swept un­der the car­pet”.

“A fur­ther anal­y­sis re­vealed that there was no ex­cuse for non-pay­ment of these ac­counts. The rea­son for ex­clud­ing them from credit man­age­ment was to re­duce cus­tomer com­plaints. Upon iden­ti­fy­ing these cus­tomers, we have in­sti­tuted a credit man­age­ment. We are in the process of con­clu­sively re­solv­ing every ac­count query reg­is­tered with the city, he said.

In terms of the city’s liq­uid­ity sta­tus, as of June 2017, the clos­ing cash bal­ance was be­tween R3bn and R4bn.

Over the years, there were many in­ef­fi­cien­cies in the fi­nan­cial man­age­ment of the mu­nic­i­pal owned en­ti­ties (MOEs) such as City Power, Joburg Wa­ter and Pik­itup. The in­ef­fi­cien­cies had a neg­a­tive im­pact on the MOEs’ fi­nances and this prompted the DA-led ad­min­is­tra­tion to start a process of re­ab­sorb­ing the MOEs to im­prove ef­fi­cien­cies in fi­nan­cial man­age­ment, he added.

A down­fall the coun­cil ex­pe­ri­enced was that it had to pay a VAT re­fund of about R300 mil­lion to the South African Rev­enue Ser­vice (Sars), in­her­ited by the pre­vi­ous ad­min­is­tra­tion and the can­cel­la­tion of a con­tract with Eskom and the Kelvin power sta­tion, which lost the city R3m.

Da­gada said a num­ber of rev­enue en­hance­ment in­ter­ven­tions are un­der way to im­prove the com­plete­ness of rev­enue and con­se­quently the liq­uid­ity po­si­tion of the city.

“The city’s fi­nances are in a sound po­si­tion. The fi­nan­cial state of af­fairs will be re­vealed by the au­di­tor-gen­eral when he is­sues his re­port in Novem­ber. The City of Joburg is the least de­pen­dent on na­tional gov­ern­ment grants and the high­est spender – pro­por­tion­ately – on so­cial hous­ing, com­mu­nity fa­cil­i­ties and equip­ment to en­able front-line ser­vices.

“We have in­creased ac­cess to ba­sic ser­vices, in­clud­ing elec­tric­ity, to un­prece­dented lev­els, in­clud­ing through our new mi­cro-grids in in­for­mal set­tle­ments. We have in­creased in­vest­ment in roads and traf­fic sig­nals which are the ar­ter­ies of life and com­merce in this great city, up­grad­ing our key bridges and high­ways as we go.”

It was in­ac­cu­rate for the ANC Joburg to pur­port that, un­der mayor Mashaba’s ten­ure, the City of Joburg’s fi­nan­cial sta­bil­ity has been in a state of per­pet­ual de­cline or pre­car­i­ous.

The fi­nan­cial state of af­fairs will be re­vealed by the au­di­tor-gen­eral

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