The magnitude of the challenges in Enoch Mgijima Municipality is the same as the VBS Mutual Bank, administrator Vuyo Mlokoti told parliamentarians who visited Komani on Wednesday.
Mlokoti was speaking to national council of provinces (NCOP) members, who sit on the co-operative governance & traditional affairs portfolio committee, at a meeting at the Thobi Kula Indoor Sport Centre.
“This municipality is not different from VBS as the financial state they both have requires the same financial assistance. Both these institutions need the same attitude,” he said.
After almost R2bn was looted from the bank, the SA Reserve Bank successfully applied for VBS to be liquidated on Tuesday.
Mlokoti said when he took over the running of the troubled municipality, it had serious revenue collection challenges. Households were the biggest culprits, owing the municipality R520m in rates.
“We had to work on a recovery plan and we are taking the managers on board so that they grasp the plan. We have made progress in getting some of the grants that were withheld by National Treasury and we are still negotiating with National Treasury,” he said.
Mlokoti said they were working with the business chamber to turn things around.
“It is important to partner with business, ratepayers and all stakeholders in order for the municipality to succeed,” Mlokoti said.
He said they had introduced cost cutting measures by tightening their belt and freezing some of the operations and benefits of the workers and councillors.
The administrator identified ageing infrastructure as their biggest challenge.
MP Gladys Oliphant said she had noticed that some councillors did not understand why Bhisho had placed the municipality under administration.
Another NCOP member, Mergan Chetty, said: “The NCOP comes after the decision has been taken to bring an administrator and we are in principle correct. It is unacceptable to have the Eskom debt rise from R85m to R146m; the administrator must make a plan to settle the Eskom debt.”
MP James Mthethwa said he was concerned that business formations were not at the meeting.
“The administrator and the mayor Sisisi Tolashe must extend an invitation to the business sector so that they are part of seeing that the financial issues of the municipality are attended to.
“The municipality cannot cry that it does not have the financial muscle when there are provincial governments that owe the municipality,” he said.
UDM councillor Mthuthuzeli Hokolo rejected the intervention of the administrator, stating that there was no need for the intervention as Chris Magwangqana was doing well.
EFF councillor Luthando Amos called for the municipality to be dissolved, saying it was beyond reconstruction.
“There is no political will and that will lead to the administrator to fail even though he is capable,” he said.
DA councillor Zuko Mandile and ANC councillor Sibusiso Mvana blamed the amalgamation of Lukhanji, Inkwanca and Tsolwana for the problems in Enoch Mgijima, stating that there was more than R200m that was supposed to be part of the process but the municipality did not get that amount.
They both supported the intervention by the provincial government and called on National Treasury to release municipal infrastructure grants that it had withheld.
The ANC Youth League, ANC Women’s League, ward committees and all the unions in the municipality supported the interventions by Bhisho...