Home News . . . while Sol owes millions for utilities

. . . while Sol owes millions for utilities

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The total outstanding debt to Eskom at the end of September was R161 million, which included the September account of R35 million

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THE CRACKS in the Sol Plaatje Municipality’s financial veneer are starting to show in the municipality’s inability to settle its debts.

According to the latest Budget Overview Report, the municipality’s June 2019 account from Eskom, amounting to R61 million, was settled in July.

“During September the municipality settled R7 million on the July account of R81 million, as per the payment arrangement. On the August 2019 account, amounting to R71.5 million, the municipality could only manage to settle R8.5 million.

“The billed amount for September 2019 amounted to R35 million.”

The total outstanding debt to Eskom at the end of September was R161 million, which included the September account of R35 million.

The bulk water account, meanwhile, amounted to R24.7 million for July and August 2019 and was due on September 30. “The municipality could not afford to settle this amount. Subsequently payment arrangements have been made with DWS in respect of this account and on October 7, the municipality settled R5 million.”

The payment arrangement signed was for a monthly payment of R2.5 million. The September account amounts to R13.5 million.

By the end of September, the total outstanding debt to DWS was R34 million.

The report was due to be discussed at an IDP, Budget and Performance Management Committee meeting on Tuesday this week but the meeting was postponed until further notice. No reason was given for the postponement.

Earlier this week, an inter-ministerial task team (IMTT) established in 2017 to deal with municipalities’ non-payment for electricity and water, announced that a new prepaid meter system would be implemented on a trial basis at four municipalities in the country to cut down on municipal water debt.

The four municipalities have currently been selected for this pilot include Maluti-a-Phofung (Free State), Thabazimbi (Limpopo), Naledi (North West), and Govan Mbeki (Mpumalanga).

Growing

The IMTT said that these prepaid smart meters have the potential to alleviate the growing water debt problem through: cash flow improvement; smart systems (intelligence) to manage the networks, reduction of water losses; and addressing the culture of non-payment.

Municipal water debt has been increasing at an alarming rate with just under R15 billion owed as at the end of September 2019.

MPs yesterday warned against government’s plans to introduce the prepaid water and electricity meters, stating that the hardest hit by this move would be the poorest of the poor, and those who were unemployed.

“We are following up on the work of the inter-ministerial task team to establish the facts around the debt owed by municipalities to both water boards and Eskom,” Cogta Deputy Minister Parks Tau said. “There has been a requirement to respond through interventions to ensure municipalities meet their obligations, and have a discussion to find solutions to a range of problems.”

Chief executive of the Municipal Infrastructure Support Agent, Ntandazo Vimba, said municipal debt had been increasing at an alarming rate.

“It is recommended that this provision be extended to include officials of all organs of state and political office-bearers as part of a drive to inculcate a culture of payment for municipal services,” he said.

The planned introduction of prepaid meters drew mixed reactions from MPs.

The EFF’s Shirley Mokgotho said only the few who were working would be able to afford to pay for water when prepaid meters were installed.

“Most of the people will not be able to pay and the people will start marching to municipalities because water will be cut from their taps. You would not have solved the problem,” she said.

The ANC’s Bheki Hadebe said a long-lasting solution was needed and warned against the meters, citing problems experienced in Cape Town when they were introduced.

The DA’s Leonard Basson said installation of prepaid meters would cost billions and would not help municipalities to pay up.

Human Settlements, Water and Sanitation Deputy Minister David Mahlobo said one of the decisions public representatives and government officials had to make was to pay for services and lead from the front.