Post-VBS ‘broke’ municipality chases town debtors to pay up

In a bid to survive the aftermath of the contentious VBS Mutual Bank investment, the Elias Motsoaledi local municipality in Limpopo has embarked on an aggressive revenue collection drive to force debtors to pay for services.

The bankrupt municipality in Groblersdal in the Sekhukhune region of Limpopo had invested R190 million with VBS.

Now the once-flourishing municipality is allegedly penniless, failing to run its day-to-day service delivery functions.

Sources within the municipality said in an effort to cope with activities such as refuse collection, road gravelling and delivery of water through municipal water-tankers, the municipality took money from other divisions to fund the projects.

“Yes, it is correct that we have embarked on a revenue collection drive,” said municipality spokesperson Simon Makua yesterday. “We have noticed with concern that our communities were no longer paying for their services. We felt it is only right to remind them about the importance of paying so we continue servicing them.”

But Makua denied allegations that the municipality was bankrupt. “It is totally untrue that my municipality has financial challenges. We are able to pay our service providers every month and I am sure we will also be able to pay the salaries of our employees by December,” he said.

Seun Mogotji, acting secretary-general of Bolsheviks political party, did not agree. Mogotji said the municipality was as poor as a church mouse.

“The municipality is expected to pay about R6 million to employees every month. In December, they are expected to pay more because workers want their bonuses. Unless they have borrowed money from other divisions or money-lenders they won’t afford to pay salaries this month and December.”

Last month the municipality slapped the municipal manager and CFO with precautionary suspension letters. The municipality gave the latter until yesterday to respond to the council as to why they should not be suspended.

“In the meantime, the council launched an internal investigation to determine as to whether or not they followed the right prescripts of the law when investing the money into VBS,” said Makua.

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