Ekurhuleni finance member of the mayoral committee (MMC) Jongizizwe Dlabathi said the metro was making progress in addressing the R13bn debt the DA says the municipality owes service providers.
DA Gauteng MPL and Kempvale constituency head Mike Waters said businesses were suffering as the metro owed service providers R13bn. He said the city’s failure to pay service providers within the stipulated 30 days would result in job losses and service delivery failure.
“The City of Ekurhuleni’s debt to service providers has ballooned to R13bn, more than double the R6bn figure the Gauteng MEC for co-operative governance and traditional affairs reported to the Gauteng provincial legislature last month,” Waters said.
“This is not a bookkeeping error; it is a direct violation of the Municipal Finance Management Act, which requires municipalities to pay service providers within 30 days. In failing to do so, Ekurhuleni is breaking the law, crippling small businesses and sabotaging service delivery across the city.”
Waters said R13bn in unpaid bills was not just a number on a spreadsheet, “it means small businesses going under, workers not getting paid and communities left without services. The current administration has turned Ekurhuleni into a debtor’s prison, the MEC is the warden”.
“This ongoing financial crisis in Ekurhuleni deserves immediate attention. The DA will write to MEC Mamabolo to ascertain what measures and interventions his department are taking to assist this metro to address this issue. The DA Ekurhuleni caucus will also raise this issue in council for it to be addressed. The DA will continue to hold this government accountable until residents get the services they pay for,” Waters said.
Speaking to Business Day on Thursday, Dlabathi said unpaid invoices stood at R13bn at the end of June, but had since been reduced to about R10.2bn as of October 2, noting this was not necessarily the current overdue amount.
He said the debt was largely for bulk services such as water and electricity. In July, Rand Water CEO Sipho Mosai said municipalities owed the bulk water supplier a combined R8bn by the third quarter of 2024/25, up from about R1.5bn in 2015, placing a serious strain on its ability to function.
Rand Water supplies Gauteng’s three metropolitan municipalities, local municipalities, mines and other industries, as well as parts of Mpumalanga, the North West and Free State with an average of 3.653-million litres of potable water daily.
Dlabathi said: “We will continue to collect revenue and service our suppliers. This is not unique to Ekurhuleni; municipalities across [the country] are facing a challenge of nonpayment for services rendered.”
Ekurhuleni North Chamber of Commerce and Industry has been approached for comment, which will be added once received.
This week finance minister Enoch Godongwana said the reforms aimed at addressing the deteriorating quality of services in most of the metros would help improve the local authorities’ financial positions and stop their dependence on grants.
He said by addressing the key three trading services of water, sanitation and electricity, it was hoped the reforms would help unlock the economy and improve service delivery.
President Cyril Ramaphosa said the government would work with the country’s 257 municipalities this year to ensure there was adequate investment and maintenance of the water and electricity systems, as part of the second phase of Operation Vulindlela, a joint initiative of the Treasury and Ramaphosa’s office set up in 2020 to reinvigorate the economy.
Business Day reported in May that the Treasury was working with the metros on a R54bn performance-based incentive that will help them with cash to fix their water, electricity and waste management services, on condition they ring-fence revenue from these services in professionally run utilities that can ensure service delivery.
In an engagement session on the metro’s trading services reforms with executive mayors this week, Godongwana said in the past 40 years, “we have observed underinvestment in key network industries, namely water, sanitation and electricity”.
“This has not only created a backlog, but it has also led to an inability to continue to connect more households and firms to the network. It has also created an inability to position our cities as the most efficient providers of reliable water, sanitation and electricity,” he said.
“We need to work collectively to address this underinvestment, which has not only made our cities unattractive for investments, but it has also created financial challenges for some municipalities.”
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