Polokwane debt book a thriller

Consumers owed Polokwane Municipality a staggering R781 159 801, with R412 900 000 outstanding for more than a year, for services and assessment rates by the end of 2016.
This alarming information was revealed in a report that was tabled in the special council meeting that took place last Tuesday and reflects figures as on 31 December 2016. Households owe the municipality R477 221 000, the commercial sector R196 548 000, organs of state R38 380 000 and others R69 010 000.
Other financial information indicates that outstanding loans of the municipality amounted to R188 969 739. Negotiations between the municipality and financial institutions may lead to a further amount of R440 million to be taken on loan. The municipality needs these funds to replace aged water infrastructure and the asbestos cement pipes in some areas.
The municipality owed its creditors an amount of R63 915 884 and the report certified that all creditors are paid within 30 days in accordance with the Municipal Finance Management Act.
The municipality also had an amount of R283 100 800 on investment at an average interest rate of 6,8%. Long-term investments were made at Standard Bank (R59 million), Sanlam (R10,5 million), VBS Mutual Bank that is also known as ‘The Zuma Bank’ and based in Louis Trichardt (R174 million), Nedbank (R36 million) and Liberty Life (R36 million).
The municipality’s actual billed revenue was R1 312 795 amounting to 47% of the budget amount. This includes direct income, operating grants and money borrowed.
Total expenditure was R1 257 971 917, representing 49% of the budgeted amount. The costs incurred relates to employee costs, bulk purchases, contracted services and general expenses. The municipality’s full year forecast is to close books on 30 June 2017 with a projected surplus of R861 795 000.

Story & photo: BARRY VILJOEN
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