Crippling debt, outages and outrage

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Raw sewage in streets and in homes has added to residents unhappiness with Makana Municipality. File photo: Sue Maclennan

Political scientist and  government adviser Mzukisi Mpahlwa was on Monday 17 December announced Makana Municipality’s new Mayor. Click here for the full story and interview. Below Grocott’s Mail summarises some of the challenges he is taking on.

  • With a crippling debt of R169.8 million, fruitless and wasteful expenditure in the form of ballooning interest payments, continues to blot Makana’s books. (Source: FAME portfolio meeting, 20 November 2018)

Upgrades to James Kleynhans Water Treatment Works allowing the facility to treat and distribute 30ML a day could be as long as two years away. File photo (May 2018): Sue Maclennan

  • The upgrade of the James Kleynhans Water Treatment Works allowing an output of 30ML a day is well under way. Along with other infrastructure upgrades and repairs, this is intended to meet the city’s water requirements. But delays mean it could be as long as another two or even three years before this target is met. Meanwhile, residents are becoming increasingly angry about erratic or no supply and poor water quality, as engineers struggle to maintain and repair the old infrastructure.
  • Vandalism of water infrastructure is a growing problem, further taking resources away from the municipality’s core business of service delivery.
  • Sewage leaks flood streets and people’s houses across the city, but particularly in Extensions 5, 6 and 9.

Makhanda (Grahamstown) residents march in protest to the Makana City Hall on Tuesday 9 November, where they handed over a petition calling for the dissolutionof the Council. File photo: Stephen Kisbey-Green

A notice published by Eskom in November threatening to cut of the electricity supply to Makhanda (Grahamstown) on 4 December because of unpaid debt was the last straw for residents. An unprecedented alliance between social activists, businesspeople and ordinary residents from across the municipality last month saw a petition of over 21 000 signatures delivered to the MEC for co-operative governance calling for the Section 139(1)(c) dissolution of the Council and fresh local government elections.

Suspended Infrastructure Director Dali Mlenzana addresses residents protesting against poor water quality outside the Makana Council Chambers on Thursday 31 May. File photo: Sue Maclennan

  • The crucial directorate of Technical and Infrastructural Services, which is responsible for addressing some of the city’s worst service delivery nightmares (water outages, sewage leaks) is undercapacitated: its director Dali Mlenzana is locked in litigation with the municipality over his suspension pending disciplinary processes relating to alleged financial mismanagement, and key staff in the directorate have resigned.

The nightmares by numbers

Last month’s Finance, Administration, Monitoring and Evaluation portfolio committee meeting (20 November 2018) recorded positive results from measures to control expenditure and improve revenue collection. Cash flow as of 31 October 2018 showed a positive balance of R19.3 million and acting chief financial officer Colleen Mani reported that all grants and subsidies received in that month had been ring-fenced and transferred into a separate investment account.

However, despite efforts made by departments to reduce overtime, Mani reported, overtime still made up 59% of employee related costs in a monthly salary budget of R14.5 million. Meanwhile, business, residents, government, councillors and staff collectively owed Makana R417.9 million.

At 31 October the municipality owed R169 884 124.47 – a debt still crippling despite the R9.7m reduction since the previous month.

Legal fees and related payments in October alone amounted to R205 711.

Payments on long-running debts in October included R1 75 877 (Municipal Infrastructure Grant); R574 881 (Development Bank of Southern Africa loan); R1 286 788 (Water Services Infrastructure Grant).

Fruitless and wasteful expenditure as at 31 October was R1 717 092.22. The bulk was made up of interest on delayed payments to: Amatola Water (R316 948.20) Eskom (R47 820; R51 358; R9 855; R72 156; R410 and R911 456); Auditor General (R11 023).

The amount of R270 000 was paid in damages for a house at Egazini demolished without proper negotiations.

 

WHAT MAKANA OWES

Eskom (bulk account payment): R78 868 485.89

Eskom (Thomas Baines installation): R4 590 8489

SALA pension fund (deductions had not previously been paid over): R1 104 308

Auditor General (excluding current fees): R1 350 000

SALGA (prior year and current levies): R2 947 643

DBSA (20-year loan): R54 380 900

Amatola Water (crisis intervention): R35 128 195

Sibanye Valuers (previous valuation roll): R3 891 408

  • Source: FAME Portfolio Meeting 20 November 2018.

New Mayor calls for support

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