Govan Mbeki Municipality defaults on Eskom agreement
The DA calls on the MEC for Cooperative Governance and Traditional Affairs (COGTA), Refilwe Mtshweni, to urgently institute a Financial Recovery Plan for Govan Mbeki Municipality (GMM) due to the unsustainable financial state of the municipality.
Govan Mbeki Municipality defaults on Eskom agreement
Date: 31 May 2017
Release: Immediate
The DA calls on the MEC for Cooperative Governance and Traditional Affairs (COGTA), Refilwe Mtshweni, to urgently institute a Financial Recovery Plan for Govan Mbeki Municipality (GMM) due to the unsustainable financial state of the municipality.
The municipality is failing to pay for its bulk electricity purchases from Eskom and is now defaulting on its arrangement to pay off the outstanding debt.
This was revealed during a Council sitting where it also came to light that for the month of March 2017, the Municipality only managed to pay R15 million of the R40 million municipal bill, while the current account balance of R51 million is still outstanding.
The Municipality’s total debt to Eskom amounted to R352 030 429, however, earlier this year, the Municipality entered into an agreement with Eskom to pay off its outstanding debt.
The Municipality agreed to pay R100 million immediately when the agreement was signed and to settle the R252 030 429 by December 31, and also ensure that monthly payments are made timeously – but to no avail as the Municipality has failed to honour the agreement.
This ANC government’s failure to pay their electricity bill on time could have dire effects on residents and businesses who purchase their electricity from the municipality.
The Municipality is also struggling to collect nearly R600 million owed for services rendered by the municipality because of poor planning.
In an effort to collect the money, GMM launched Operation KODIKO (Koleka Di Koloto) in March this year where all councillors and senior staff members were deployed to ask businesses and private residents to settle their outstanding debt.
Unfortunately, the Operation is failing because the municipality does not have a clear plan of how it will encourage debtors to settle their debts.
The DA will request MEC Mtshweni to speedily implement a Financial Recovery Plan for the Municipality and demand answers on how, on her watch, recurring debt to Eskom has gone unpaid.
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