Gauteng municipalities lose up to R4bn
Gauteng municipalities have lost R4bn in revenue due to the Covid-19 pandemic.
This was revealed by Gauteng MEC of cooperative governance and traditional affairs Lebogang Maile on Wednesday as he outlines the state of municipalities in the province. Maile told journalists that the pandemic has had a massive negative impact on local government revenue as residents are under serious financial strain.
“Over the months of April and May, Gauteng municipalities overall lost roughly R4bn worth of revenue that would have been collected if not for Covid-19, with the metros being the worst hit.
“Tshwane lost approximately R1.2bn in revenue not collected, Johannesburg R1.5bn and Ekurhuleni roughly R800m. Over and above these revenue losses, municipalities have had to provide emergency services to supply additional water to communities during this period, more toilets and greater frequency in refuse collection, sanitisation and decontamination, sites for quarantine, shelter for those in need as well as food for indigent homes,” Maile said.
Maile said despite the financial strain, municipalities are still able to provide basic services such as water and electricity.However, Rand West City has asked for assistance from Maile's departmet as it is in financial distress.Most municipalities felt the financial pressure of Covid-19 bulk purchases and payment to creditors towards the end of May, Maile said.
In April, President Cyril Ramaphosa announced a R20bn allocation to municipalities for the provision of emergency water supply, sanitizing public transport facilities and support vulnerable communities. These funds include direct transfers to municipalities in order to support their increased operational costs, in a period when revenue has declined. Maile said due to low revenue municipalities has started defaulting on their payment to Eskom and Rand Water.A meeting was convened on Tuesday to address this issue. It was agreed that Cogta should convene a meeting with Eskom and Rand Water to resolve the issue of payment, in light of revenue declines.
Municipalities are also expected to ring-fence some of the relief funds from national government to pay Eskom and Rand Water. Mayors and Gauteng Cogta also agreed that Eskom and Rand Water should be engaged to see if payment terms cannot be changed from 30 days to 45 days as well as on whether they can relax their terms on interest on debt.Meanwhile, Maile said the term for acting Emfuleni municipal manager Oupa Nkoane to stabilize the town on a provincial government mandate has ended. The intervention started in June 2018 and ended as the town appointed its own municipal manager.
“The intervention has not produced the desired outcome up to now, with the municipality continuing to experience serious challenges that require a stronger, firmer hand in order to turn things around,” Maile said.
Provincial government has now appointed Willy Bila who is deputy director-general of Cogta in the province as an administrator to help turn around the municipality. Maile and finance MEC Nomantu Nkomo-Ralehoko will provide oversight over his intervention. Bila’s work should “ideally” not last more than 12 months, Maile said. A team of experts will be appointed to assist Bila with his work.
Emfuleni has had financial problems for some time.In March, Maile reached an agreement with Eskom for the council to R50m in order to stop the power utility from attaching the town’s assets. At the time, the municipality owed Eskom R1.8bn.