Ekurhuleni is not a broke metro – MMC

“There is no such thing as no money in the City of Ekurhuleni (CoE). We are only exercising fiscal restraint.”

Ekurhuleni speaker of council Nthabiseng Tshivenga made this statement after the council met on October 17 where they tabled the CoE finances for discussion.

While the ANC, DA and ActionSA claimed the City of Ekurhuleni has no money, Finance MMC Nkululeko Dunga denounced the claims, suggesting the municipality is facing a fiscal crisis.

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“The city’s finances remain intact,” Dunga said.

The DA said in June the city’s cash flow was reportedly sitting at R438m, representing less than 13 days of cash on hand.

“The city has over R3b in outstanding payments owed to creditors, of which R245m owed to Eskom, R174m to Rand Water, R117m to Ekurhuleni Water Care Company and R2.5b to outsourced contractors,” the DA stated.

The ANC, which is part of the coalition government, and several other opposition parties, including ActionSA, also raised concerns over what they described as the ‘deterioration of the city’s finances’.

“There seems to be a concerted effort to paint a picture of the city’s coffers which does not exist,” said Dunga on Tuesday.

“We do not owe Eskom. Eskom on October 3 submitted to us an invoice of R1.3b and on October 4, they said in a media statement that we owe them. The money owed is a current account that Eskom acknowledged is due on October 28,” said Dunga.

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“The only dispute we have with Eskom is what they define as penalties and interest for late payments.”

Dunga admitted the city has an overdue account towards its suppliers of about R1b, plus R300m, which is current.

“The city’s financial year was concluded on August 31. All financial statements, suppliers and creditors would have to compile all their invoices for the end of the financial year, including those that have not been declared before to the Department of Finance, which would then increase what is owed.

“The measures had put in place will make it easy for us to squash the about R1.3b owed to service providers.

“The MMC said in the same period last year, the city’s cash in hand was at R210m. This almost doubled as the city has about R378m, which gives it about 13 days cash in hand,” said Dunga.

“We still want to be in a better financial position, hence we have introduced programmes such as operation Siyacima Manje-Namhlanje.

“This seeks to recoup R5b that the CoE lost because of overdue accounts that are sitting with state-owned enterprises, government departments and businesses in the city.

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“We are looking at disconnecting services at hijacked buildings and aggressively dealing with water leaks. This is an attempt to curb the water and electricity losses that we incur.”

In response to Germiston City News’/Bedfordview Edenvale NEWS’ question whether the financial situation impacted the people’s government programmes, Dunga said, “There are no fundamental programmes we proposed and wanted to do that we could not affect in our current situation that we find ourselves in.

“We are not in a financial dire situation where the city will collapse tomorrow like other municipalities,” said Dunga.

Opposition parties disagree

ActionSA believes the ANC-EFF coalition is pushing the city towards a meltdown and demanded the CoE to implement immediate interventions.

“The Executive Mayor Sivuyile Ngodwana, Dunga and city manager Dr Imogen Mashazi must come clean and admit that they have failed to put basic financial controls in place that would improve the city’s balance sheet,” said Siyanda Makhubo, ActionSA Ekurhuleni caucus leader.

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“This is alarming for a city on the brink of collapse as far as service delivery is concerned. Under the EFF-ANC coalition, Ekurhuleni is limping from crisis to crisis due to political infighting.”

ActionSA further suggested interventions the CoE needs to implement to avoid being placed under administration.

These interventions include re-integrating municipal entities into their line departments to reduce the wage bill, increasing residential collection rates (which are currently at 64%), appointing contractors to collect revenue in Eskom serviced areas, eliminating no-go areas where illegal electricity connections are rife, increasing investment in water and electricity infrastructure and install smart meters to reduce unaccounted water usage.

The DA is not surprised by the CoE’s state of finances.

“The National Treasury warned the city about its dire financial position,” said Ald Tanya Campbell.

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She also raised transparency as a concern, “Why is it that, despite quarterly reports indicating a dire financial situation, the executive does not report monthly on the city’s finances?

“Their haphazard reporting serves to strengthen their lies. It should come as no surprise that contractors and entities alike are starting to refuse assistance and service delivery to residents,” said Campell.