The broke and battered Walter Sisulu municipality has been granted a 90-court day reprieve from litigation from creditors who want to be paid for services rendered.
The municipality, which owes creditors some R206m that it simply cannot pay, on Thursday resorted to court on an urgent basis to stay all litigation – including execution proceedings – from creditors claiming money from it.
It did so just in time. Accounting firm PriceWaterhouseCooper (PWC) has a judgment debt against the municipality and was seeking to attach and sell off its assets to recoup R3.2m owed to it.
This, says newly appointed municipal manager Fezeka Ntlemeza, would cause irreparable financial harm to the municipality as the only assets worth anything would be their vehicles, which they need for service delivery.
She said the problem started with the August 2016 amalgamation of Maletswai and Gariep municipalities. Maletswai owed R85m to creditors. Once the municipality combined with Gariep, this debt immediately swelled to over R206m.
Its biggest creditor by far is Eskom, to which it owes some R158m. It owes over R23m to pension funds and R4.6m to the auditor-general.
PWC comes in as its fourth largest creditor at R3.2m. “The effect of this order is that nobody can now pursue legal proceedings against the municipality to recover money, nor can they execute against the municipality during this time,” said the municipality’s attorney, Brin Brody...