A councillor has called for Makana to ringfence revenue generated for the sale of electricity for the sole purpose of paying the municipality‘s current account and settling its outstanding debt. Meanwhile, senior Council officials were scheduled to meet this week with experts to obtain advice on managing the Eskom relationship.
In a written proposal to Council dated 2 October and tabled at a special council meeting on Wednesday, Ward 12 councillor Darryn Holm noted that because of Makana’s failure to adhere to its payment plan with Eskom, its debt would increase in the long term. Holm noted that Eskom constituted the bulk of Makana’s outstanding creditors at the end of the fourth quarter of 2016/17, at around 42%.
Submitted earlier this month, the proposal now comes in the wake of Eskom’s announcement last week that it would throttle Makana’s supply because of non-payment towards its outstanding amount of R52 366 886.70. In a notice published in a regional newspaper, Eskom said the supply to Makana would be interrupted from 8 December should the municipality fail to adequately address its payment breaches.
In Wednesday’s Council meeting, speaking to the proposal, Holm said, “We have a constitutional mandate to deliver electricity and it’s unfair for those who are paying to be threatened with the withdrawal of that service.”
Holm said the threatened cuts were at the start of the festive season, also a time when crime was higher.
“Something drastic has to happen,” Holm said. “The money received for that service should go to paying off those debts.”
Holm said Makana’s debt to Eskom was increasing by around R20 million each year.
“Our monthly bill ranges from R12m to R16m, but we can only ever pay R5m-R8m. There’s no real plan to cut down this debt and it’s a serious concern,” Holm said. “By the end of next year we will owe around R70m.”
He said he’d hoped, in response to the table question, for a cost analysis that would show why the right amount to Eskom couldn’t be paid, and what would be done to solve it.
“I’d like to know what the plan is going forward,” the councillor said.
Earlier in the meeting, Speaker Yandiswa Vara also raised the Eskom threat.
“We must pay Eskom without changing our payment plan,” Vara said. She said the Mayor Nomhle Gaga and acting municipal manager Nomthandazo Mazwai were among the senior Council officials who would be joining her in a meeting to seek expert advice on managing the Eskom threat.
Commenting on the Expenditure Report for the quarter ending 30 September, Councillor Mabhuti Matyumza referred to the table of payment plans to various entities including Eskom (owed R59 641 041), the Auditor General (R10.3m) and the Development Bank of Southern Africa (R51.1m). He noted that Amatola Water should now be added to that plan.
Meanwhile, a progress report on the Kabuso Investigation (the report release in 2015 in which several council officials were implicated in corruption or wrongdoing) noted that the report had been handed to the South African Police Service for investigation.
This would “also cover all allegations of fraud against all employees mentioned in the report” acting municipal manager Nomthandazo Mazwai wrote.
According the the report tabled, actions were taken to implement the Kabuso Report’s recommendations.
Former municipal manager Pravine Naidoo had been dismissed after a disciplinary process and lawyers were instructed to recover the R489 620 he owed Makana.
“Dr Naidoo could not find employment for some time and could therefore not pay back the money,” the report noted.
It had been established that he was now employed and had submitted a request for a 24-month grace period before he entered into a payment agreement. “The instruction to municipal attorneys is to refuse the request,” the report says.
An application had been made to the Labour Court to recover R280 000 from former strategic manager Mncedisi Boma. The matter was to have been heard late last year but was postponed at Boma’s request.
In addition to the civil claim against Boma, a criminal case had been opened for his unauthorised possession of a municipal file of Naidoo.
Council employee Noluthando Santi had repaid an ex-gratia payment unduly paid to her and no discplinary process had been initiated against other staff mentioned in the report. This was because nearly two years had lapsed since the report was submitted to Council in 2015.
“The Collective Bargaining Agreement provides that the municpality can institute a disciplinary process three months after being aware of a misconduct or transgression,” the report states. “If that has not happened the municipality has to apply for condonation to the Bargaining Council.”
The report said handing over the report to the police meant allegations of fraud against employees were covered.