As the threat of punitive disconnections looms, the Democratic Alliance in the Northern Cape requested a joint briefing to find a permanent solution for the persistent non-payment of municipal accounts by provincial departments.
During the presentation of the budget for the year ahead, the Member of the Executive Council for Roads & Public Works, Fufe Makatong, indicated that the Northern Cape Department of Roads & Public Works received R111 million to pay municipal accounts estimated at more than R300 million. The problem lies with inherent shortfalls in the budget processes when municipal tariffs increase faster than provincial income does. While the provincial income is expected to grow by an average of 5.1% over the next three years, NERSA approved tariff hikes of 9% on electricity sales alone.
While it might not be the department’s doing, it remains responsible for paying municipal bills and we simply cannot ignore or create a situation where cash-strapped municipalities get less than R3 of every R10 billed to the provincial government. Every user must pay his or her municipal account on time and in full, especially bulk consumers like departments that uses huge amounts of water and electricity each month. Revenue collection is already an uphill battle in the Northern Cape, which has experienced the highest levels of unemployment in the past five years.
We need the department, along with officials from the Northern Cape Provincial Treasury and the Office of the Premier, to present long-term solutions for this financial challenge.
We also need feedback on the implementation of the Eskom municipal debt relief programme. Three of the sixteen municipalities in the province that originally qualified for this programme had been kicked out so far, because they could not meet the strict terms and conditions. The programme intended to reduce municipal debs, but the arrears owed to Eskom by the Renosterberg and Kai !Garib municipalities alone now amount to more than R1.196 billion. Kicking them out of the programme is not a surprise, but it does raise concerns about the future and financial sustainability of these municipalities.
It also raises questions about the provincial treasury’s failure to either notice or to act on the warning signs.