21 February 2013

South Africa: Media Address By the North West MEC for Local Government and Traditional Affairs, Hon China Dodovu On the City of Matlosana Eskom Bill

press release

1. As you may be aware of the fact that the City of Matlosana has not been able to fulfil its obligation of paying its debtors to an extent that some even threatened to withdraw their services.

2. Very recently, the power utility, Eskom was even on the verge of cutting off the electricity supply to the City of Matlosana and its surrounding areas. The municipality had its electricity bulk account in arrears since August 2011 standing at R19 million at that time and currently as at December 2012 is in the range of R141 390 759.00, the municipality has however since managed to reduce the Eskom bill with an amount of R68 million.

3. Our realisation on the impact that led to the accrual of this high Eskom bill, is mostly as re-iterated by Eskom that there has been no increase in the consumption but rather the increase in tariffs and the high and low demand season rates especially in winter. Having said that, when the municipality could not honour its payment arrangement, Eskom issued a disconnection notice, which however was also not effected at that time as the provincial government had through the MEC's for Local Government and Traditional Affairs and Provincial Treasury, pled with Eskom to retract the decision to disconnect.

4. It has further been established that the municipality is being owed to a tune of R940 million of which R42 million is owed by government departments. The Department of Local Government and Traditional Affairs has had several engagements with the municipality in order to find a solution to the situation before it got worse. It also assisted the municipality to develop of a recovery plan including recovering government debt. If the situation was to be left unattended, it would obviously have serious dire consequences to not only the economy of the City of Matlosana, but also that of the entire province.

5. Amidst the situation with the City of Matlosana, we have an obligation as government to support, strengthen the capacity, monitor and supervise municipalities to manage their affairs appropriately. We therefore could not just fold our arms and leave the situation unattended.

6. I am as a way forward, propose and will convene a meeting tomorrow with the municipal executive and the following departments ,i.e. Public Works Roads and Transport, Health, Education and Finance in order to solicit support in pursuit to the payment of R42 million owed by government departments.

6.2 My department will sponsor a formal submission to Eskom to retract the decision to disconnect.

6.3 My department will further assist the municipality to appoint a qualified individual to develop a realistic and time-bound turnaround plan around the municipal financial recovery plan and also to capacity official in the municipal finance section.

6.4 The R20 million has already been paid to Midvaal Company, however, further consultations to the balance owed is on-going.

6.5. The municipality has committed with the assistance of the department, to conduct an Imbizo in relation to this challenge.

6.6 Provide a comprehensive report to EXCO on the solutions made today regarding the Matlosana electricity and water bills

6.7 SALGA as the voice of municipalities has also committed to support the intervention and ensure that all the recommendations are effected.

I finally wish to plead with the municipality, to work together as a team, develop partnerships and create a better and conducive platform to ensure that improved mechanism and platform are put in place so as to further encourage our citizens to pay for services.

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