‘Insolvent’ municipality owes creditors R146-million
LISTING a litany of grave financial problems in Makana Municipality, several groups making up the Concerned Citizens Committee to Save Makana have urgently requested that the municipality be placed under administration and for funding from central government for drought relief and financial relief.
Concerned Citizens Committee chairman Ron Weissenberg sent a letter to Makana mayor Nomhle Gaga on July 5. It was received by the registry office.
In it, Weissenberg listed the extent of the municipality’s indebtedness arising from a report at a special council meeting.
The municipality owes creditors R146 184 978, and is itself owed R366 812 651 in unpaid arrears.
Weissenberg said Makana was unable to service its debt to Eskom, which stands at R55 050 503.
He said a special council meeting had been called to discuss Makana’s dire financial position on June 27, and “apparently the municipality had approached Eskom in an eleventh-hour attempt to delay cutting electricity to Grahamstown”.
Compounding this concern, Weissenberg said the June 27 council report showed that Makana collected R9 468 505 in income for electricity for May, but of this sum only paid R750 000 to Eskom.
“This means that in the last month the municipality utilised electricity income for salaries and to service the debt of Makana Municipality which is in violation of the constitution, the Municipal Finance Management Act, and the common law,” Weissenberg said.
“At no stage did electricity users consent to electricity income being utilised for anything else other than the Eskom electricity account.”
See the full story in this week’s Talk of the Town.