South Africa's Finance Minister Enoch Godongwana explained that the municipalities owed Eskom to the tune of R107.4bn that comprised of R17.4bn in current account and R90bn in arrear debt.
While municipalities owe suppliers R140.1 billion as at September, the government departments owed the Department of Public Works and Infrastructure R13.8bn during the same period.
This was revealed by the Minister of Finance Enoch Godongwana and his public works and infrastructure counterpart Dean Macpherson when they were responding to parliamentary questions.
Godongwana said municipalities owed bulk suppliers R118.7bn in arrears as at September 30.
The current account for the same month stood at R21.1bn, bringing the total owed to R140.1bn.
Godongwana explained that the municipalities owed Eskom to the tune of R107.4bn that comprised of R17.4bn in current account and R90bn in arrear debt.
He said of the R90bn owed to Eskom, R74bn was owed collectively by 71 municipalities on the debt relief programme and R58.5bn constituted municipal relief debt.
“There was therefore a R15.5bn increase in debt owed by municipal debt relief participants since 31 March 2023.
Most of this is the increase relating to the top 14 Eskom defaulters.”
Macpherson said the total amount owed by client departments was R13.8bn as at September 30.
“The client departments with the highest amounts (owed) to the department include the security cluster amounting to R12bn,” he said.
Macpherson’s response showed that R3.7bn was for accommodation at state-owned properties, R23 million for capital projects, R225m for recoverable projects, R1.6bn private lease accommodation and R7.9bn municipal services.
He said client departments disputed the municipal services charge based on building occupation, incorrect billing and high consumption.
“The department has also lodged a formal dispute with the National Treasury in terms of treasury regulations 8.7.1 for client departments that have outstanding debt where dispute resolution within the department has been unsuccessful.”
Meanwhile, Godongwana said his department has developed early warning systems to assist municipalities to identify the extent of their financial problems in addition to other support initiatives to strengthen and enforce transparency, improve fiscal discipline and promote use of municipal revenue.
He said in terms of the existing intergovernmental legislation, the Minister of Cooperative Governance and Traditional Affairs resolves and mediates issues between organs of state, including non-payment of bulk suppliers.
“Once this intergovernmental relations process has been exhausted, the National Treasury, on request, may mediate in disputes of a financial nature as per the Municipal Finance Management Act. National Treasury, in cases of persistent financial management breaches, can invoke section 216(2) of the Constitution to withhold a municipality’s Local Government Equitable Share and conditional grant transfers.
“Where the situation amounts to serious and persistent financial problems, it is the provincial executive that must institute the appropriate mode of intervention,” Godongwana said, adding that once all failed, the national government may intervene.
Cape Times