Merafong’s financial malaise continues unabated

December 12, 2014

The Merafong Local Municipality’s financial situation has rapidly declined over the past four months, and it now stands on the brink of collapse.

The revenue collection shortfall in Merafong for the past four months stands at R147,8 million, which is further compounded by outstanding debt of R766,4 million – and increases by R25 million a month.

For a period of three months the municipality failed to collect any debts, due to a change in collection service providers. Whilst a new service provider has been appointed, the collection rate remains low at less than 20%. 

 

Outstanding amounts owed to Merafong by sector are as follows:

·         State institutions: R21million;

·         Commercial businesses: R298million; and

·         Households: R466m.

 

Not only does the municipality struggle to recover outstanding debts, it also fails to follow prudent fiscal planning when making use of its capital budget. 

Four months into the financial year, only 8% (R23 million) of the R294 million budget for the year was spent.  This should be sitting around 31% – R93 million.

Similarly, the municipally struggles to manage its operational costs. Over a period of two months, an amount of R73 million was drawn from its investment portfolio – leaving a balance of just R97 million. 

 

Over the same period in the previous financial year, the portfolio’s balance stood at R314 million.

The ANC administration in Merafong is failing residents. 

 

The MEC for Cooperative Governance, Jacob Mamabolo, must launch an investigation into the  financial competency of the municipality’s. 

If allowed to continue unabated, basic services will become a thing of the past with little left of Merafong to salvage.

 

Media Enquiries: 

Ina Cilliers, MPL

Constituency Head: Merafong

060 556 4344

 

Cllr Blackie Zwart

DA Caucus Leader: Merafong

082 552 4710