Mayor blames previous administrations as municipal books are laid bare
Mayor Cllr. Xolani Dube gave a media conference at the municipality on May 2 in an effort to be open about the town's present financial situation and provide an explanation for the lack of service delivery.
Accompanied by Council Speaker Thengi Zulu and Municipal Manager, Zamani Mcineka, Mayor Dube painted a very gloomy picture on where the municipality finds itself financially.
He went back to 2009 as the last year that the municipality enjoyed a healthy financial status. “In 2010/2011, the municipality opened with a surplus of cash in its reserves of R422-million.
“The then leadership took it upon themselves to take out a loan of R164 million in 2013/2014 and another R284 million in 2014/2015, resulting in a total loan of R449 million with a 100% interest. In 2009/2010 a decision was taken to engage in a major capital programme which resulted in total cash and reserves from 2010-2016 amounting to R1,092-billion and total capital expenditure to R1,082-billion.
“With challenges already there, the municipality put more strain on the budget and reserves to fund re-engineering at a cost of R37.5-million, grants recalled cost R2- million, interest on loans R27 million, bulk purchases at R5.-miliion while the overspent operating expenditure amounted to R21,3-million.
“Eskom’s looming debt, which currently totals R 26-million and is costing the municipality R8,2- million monthly to pay off, has been a major source of worry for the municipality,” Mayor Dube said.
All of this indicates that the municipality has no money, making service delivery challenging.
“This means that for us to render services as expected, we must make miracles, that is the truth and the sad part, “stated Dube.
As the municipality looks at solutions for its financial strife, Mayor Dube stressed that the time has come to take some very tough and unpopular decisions. The decision was taken to negotiate with Eskom to take over supply of electricity to Newcastle East.
This decision was taken as a step to encourage payment because, as is the case in Newcastle West, if the people don’t pay their utility bills, the municipality will be able to turn their electricity off.
“R1,2-billion of the outrageous R1,59- billion due to the municipality by residents is owed by Newcastle East”, Cllr Dube claimed.
Cllr Dube emphasised that these are not excuses why the municipality is not delivering but rather explanations so that the residents have the full picture.
The municipality said that ‘it is actively tackling the problems caused by the unfortunate actions of the previous administration’.
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