Cash strapped Enoch Mgijima Local Municipality is currently losing around R12 million a month in electricity revenue – a main source of income for the local authority.
This was revealed by National Cabinet Representative (NCR) to the municipality, Dr Monde Tom, during a media briefing on Tuesday, August 2.
He said the previous interventions by the provincial government did not yield the intended outcomes, hence the new intervention by national government. The current intervention, which started on May 13, brought to the municipality a team of specialists in finance and engineering among other areas of focus.
Tom said the municipality needed to reduce the number of electricity outages, illegal electricity connections and tempering with electricity meters.The municipality currently owes Eskom R290 million.
“The team has conducted a detailed analysis to understand the cause of the challenges faced by the municipality. We have consulted extensively and on August 11 we will present our findings to council. We are here to help advise the municipal manager (Nokuthula Zondani) to review and reallocate resources. We will also help with concurrence on the decisions taken by the municipal manager,” Tom said.
The NCR will also help with payment of debts, management of finances and containment of costs which include the huge salary bill.
“We will help to ensure timeous implementation of accountability and consequence management.
“In governance, the intervention will focus on mitigating irregular expenditure and fruitless and wasteful expenditure. The municipality plans to buy R250 million worth of electricity in 2022.
“If there are no controls, the municipality will lose about R10 million a month in electricity revenue. The municipality has a poor financial performance and that can be seen in the amount of equitable share that has decreased. We are going to update the financial recovery plan and ensure its implementation,” he said.
Executive mayor, Thembeka Bunu, said the municipality can’t pay its Eskom debt at the moment.
“We welcome the intervention as we want to see our municipality improve. We are working well with the NCR and we are cooperating and providing the team with all the information it needs,” she said.
