Task team tackles municipal debt load

R117bn owed, mostly by households and businesses

CO-OPERATIVE Governance Minister Des van Rooyen is cracking down on rising municipal debt, after it shot up to R117 billion.

Van Rooyen said yesterday they had a task team that was working to significantly bring down the debt.

He said they were also in discussions with departments that owed municipalities a total of R5.4bn.

Most of the debt is from households, which owe more than R62bn, followed by businesses with a debt of R28bn and government departments that owe municipalities R5.4bn.

However, Van Rooyen also said they were getting municipalities that owed Eskom billions to pay up.

He said arrangements had been made with Eskom, but municipalities had defaulted because of unrealistic payment arrangements.

He said municipalities wanted to settle the Eskom debt from their equitable share.

However, this was not the correct way to do it, he said.

Van Rooyen said municipalities owed Eskom R9.5bn.

The co-operative governance minister said the task team working on the ballooning debt had made progress in reducing government debt.

“The work of the national task team on government debt is making progress in resolving the historical debt, and government departments have made commitments to adhere to their current debt,” said Van Rooyen.

He said national departments owed municipalities R2.3bn and provincial departments owed municipalities R3.1bn.

Van Rooyen has also put paid to the issue of councillors who have not been paid their gratuity after they left office in August after the municipal elections.

Councillors had been complaining that they had not been paid their gratuity.

He said more than 5 000 councillors had been paid R260 million.

“Since the local government elections, we have seen new councillors coming into office to replace approximately 5 000 who did not return,” he said.

“To this effect, the majority of the qualifying non-returning councillors were thus far paid their one-off gratuity to an amount of almost R260m,” said Van Rooyen.

But the DA attacked Van Rooyen during the debate in the House on his budget, saying municipalities were crumbling.

Kevin Mileham of the DA said since the launch of the back-to-basics programme three years ago, no assessment had been conducted on municipalities’ delivery.

But a report from one of the institutions, which was released last week, has painted a picture of a dysfunctional municipal system.

The report found that 86% of the municipalities were not viable.

Mileham said 205 municipalities relied on conditional grants from the National Treasury for their survival.

He said this was not sustainable as municipalities had to generate their own revenue.