Cash-strapped King Sabata Dalindyebo (KSD) local municipality is struggling to pay off service providers it owes R80-million. One of the creditors is Eskom, which is owed R64-million.
This information is contained in the municipality’s third quarter (January to March) report on the 2016-17 financial year. It also states that the municipality only had a balance of R17.3-million.
“There is a need to prioritise spending to manage [the] cashflow crisis of the municipality,” states the quarterly report.
The Daily Dispatch was unable to get a comment on the weekend. Municipal spokesman Sonwabo Mampoza did not respond to questions e-mailed to him.
OR Tambo District Chamber of Business president Vuyisile Ntlabati confirmed that some service providers had not been paid for their services.
“It’s a dangerous situation. The main concern is the small businesses that don’t get paid,” he said.
“You do a job and you don’t get paid. You can go under.”
The municipality was first plunged into financial crisis in 2013 after it was ordered to pay R100-million from its own reserves to a developer who was owed R300-million after he was given land which was part of a land claim.
Subsequently there had been talk from municipal bosses of introducing a turnaround plan which included stringent belt-tightening measures.
DA councillor in KSD, Raymond Knock yesterday described this as a talk shop meant to appease ratepayers.
He said both the administrative and political leaders of the municipality did not fully understand the difference between a budget and liquid cash.
As a result money was spent recklessly. He cited the enrobing of new mayor Dumani Zozo earlier this year which saw the municipality splurge more than R1-million including a colourful military parade.
“It [that money] could have paid for something,” he said.
He said the municipality should have declared its financial crisis.
UDM councillor Mabandla Gogo described the situation at KSD as a crisis. It was so bad councillors did not have cellphones as they did not receive allowances. He said the municipality had also failed to hold a council meeting for two months.
“We don’t know whether they are running away from being scrutinised.”
Gogo called for cooperative and traditional affairs MEC Fikile Xasa to intervene and closely monitor operations at KSD.
“The problem is that the municipality is corrupt,” he said. — email@example.com