THE cash-strapped Nala local municipality in Free State might face legal action if it fails to settle its debts with its electricity and water providers.
The municipality serves Wesselsbron and Bothaville and surrounding farming areas.
Sowetan has seen documents where the municipality revealed that it owes Eskom almost R12-million and Sedibeng Water more than R41-million.
This came after the municipality had failed to generate income despite R6-million being spent between 2007 and 2009 on an IT company - BIQ - to instal its billing system, but that did not prove effective.
In March 2010 it appointed another IT services provider, Pastel Evolution, which also failed to work out.
According to the information Sowetan has seen, the municipality is intending to use another system, where it would be able to generate income by billing its residents.
The report says: "Billing was a critical module that was supposed to be managed, since it is a key revenue enhancement strategy.
"The municipality has not been billing consumers since July 2010. As a result, the municipality has lost a considerable amount of revenue and has thus not able to fulfill some of its constitutional and mandatory duties.
"The municipality's credit book had increased drastically with possible litigations. Internal financial controls are not as expected and are exposed to abuse.
"Residents of Wesselsbron and Bothaville have lost confidence in the municipality."
The municipality has apparently approached both Eskom and Sedibeng Water to pay the outstanding amount.
Free State department of cooperative governance and traditional affairs spokeswoman Senne Bogatsu told Sowetan yesterday that the municipality had given an assurance that no blackouts would happen.
"The municipality has met the creditors and they have agreed on repayments. It is slowly generating its own income and should manage its revenue," she said.
"Requests [for assistance] will be considered depending on merit. The municipality should not have problems that require the department's assistance in future."
Nala's R63m water, lights bill
THE cash-strapped Nala local municipality in Free State might face legal action if it fails to settle its debts with its electricity and water providers.
The municipality serves Wesselsbron and Bothaville and surrounding farming areas.
Sowetan has seen documents where the municipality revealed that it owes Eskom almost R12-million and Sedibeng Water more than R41-million.
This came after the municipality had failed to generate income despite R6-million being spent between 2007 and 2009 on an IT company - BIQ - to instal its billing system, but that did not prove effective.
In March 2010 it appointed another IT services provider, Pastel Evolution, which also failed to work out.
According to the information Sowetan has seen, the municipality is intending to use another system, where it would be able to generate income by billing its residents.
The report says: "Billing was a critical module that was supposed to be managed, since it is a key revenue enhancement strategy.
"The municipality has not been billing consumers since July 2010. As a result, the municipality has lost a considerable amount of revenue and has thus not able to fulfill some of its constitutional and mandatory duties.
"The municipality's credit book had increased drastically with possible litigations. Internal financial controls are not as expected and are exposed to abuse.
"Residents of Wesselsbron and Bothaville have lost confidence in the municipality."
The municipality has apparently approached both Eskom and Sedibeng Water to pay the outstanding amount.
Free State department of cooperative governance and traditional affairs spokeswoman Senne Bogatsu told Sowetan yesterday that the municipality had given an assurance that no blackouts would happen.
"The municipality has met the creditors and they have agreed on repayments. It is slowly generating its own income and should manage its revenue," she said.
"Requests [for assistance] will be considered depending on merit. The municipality should not have problems that require the department's assistance in future."
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