The Eastern Cape government reportedly owes at least R136-million for rates and services to 37 municipalities in the province, with Makana Municipality being owed R15-million.
The Eastern Cape government reportedly owes at least R136-million for rates and services to 37 municipalities in the province, with Makana Municipality being owed R15-million.
This was discussed at a recent parliamentary session sparked by a question asked by the Democratic Alliance to the MEC for Local Government.
The recent report from the Chief Financial Officer to the Budget, Treasury and Integrated Development Plan (IDP) Committee revealed that Makana Municipality is owed a total sum of R15-million.
Departments such as Provincial Public Works, Education and Health seem to have the largest amounts outstanding to the municipality.
Public Works has a debt of R11-million and Education and Health are looking at just over R1-million. The report indicates that the debt is for municipal services such as water, electricity, sewerage and refuse.
“You can’t talk about service delivery if there is no money in the bank account,” said Chief Financial Officer, Jackson Ngcelwane. He said that this negatively impacts the municipality’s cash flow.
“If I would say that we can’t pay the staff salaries or settle other obligations, some of the reasons would be mainly because of this situation.”
He says this would also have an impact on the budgeting process and will slow down the collection rate, cutting down on numerous municipal projects that are essential to the rate payer such as the paving of roads.
Ngcelwane says that there has been some interventions and meetings since 2008 with the provincial government to address this matter.
“The Provincial Department of Public Works is the main problem. Some 85% of this debt belongs to Provincial Public Works,” he said.
However, he says that he understands where the problem originated. “The National Department of Public Works transferred the function of paying for property rates to the Provincial Public Works with effect from April 2008 and implemented stringent measures, whereby in terms of the Division of Revenue Act, Provincial Public Works is required to firstly ensure that all properties around a municipal area are registered in the name of Provincial Government prior making payments for services.
They also had to appoint audit firms to conduct these examinations,” Ngcelwane said. He said he understood the pressure the Provincial Department are under up to a point, “but at the end of the day, I have to deliver a service,” he said.
According to Ngcelwane, there has been a debate within the council that the services of these affected departments have to be disconnected.
Ngcelwane felt that this cannot be appropriate for certain buildings such as hospitals. However, he said that there were certain offices that had their services disconnected and they responded by paying their outstanding amounts, but according to Ngcelwane, this did not even make a dent in the debt.
