Gauteng admits its R624m municipal debt affects revenue generation

Pretoria – The Gauteng government has conceded that millions of rand it owes municipalities for property rates and other municipal services such as electricity has affected their revenue generation and cash-flow positions.

However, it has blamed its non-payment on the alleged failure by landlords to confirm property ownership, monthly invoices and statements not being sent to the relevant departments on time, or being sent to the incorrect department, among others.

Provincial treasury spokesperson Tshepo Shawa made the admission in reaction to an expose by the Pretoria News last week that Gauteng government departments collectively owed municipalities in the province huge sums in arrears for property rates and other municipal services. However, he claimed the government debt was the smallest element of outstanding debtors of municipalities “as it constitutes in aggregate about 2% of the total outstanding debt”.

The unpaid debt was revealed by Gauteng finance and e-government MEC Nomantu Nkomo-Ralehoko in her response to parliamentary questions posed by DA MPL Adriana Randall at the legislature. Randall sought clarity on the total amount owed to municipalities by the Gauteng provincial government, the names of the affected municipalities and a breakdown of the amounts owed.

The municipalities included Lesedi, Midvaal, Mogale, Merafong and West Rand. Shawa said the departments were in arrears with municipalities because of several factors, ranging from monthly invoices and statements not being sent to the relevant departments on time, or being sent to the incorrect department, and municipalities failing to resolve disputes. The payment delays could also be attributed to “payments made but not yet allocated by municipalities or payments allocated to the incorrect department accounts by municipalities”.

Further delays, Shawa said, could be as a result of “challenges with confirmation of the ownership of properties for payment of property rates as payments can only be affected once the Deeds Office process of ownership has been finalised”. “It should first be noted that provincial departments make payments to municipalities on a monthly basis with total payments of R449.24 million for the month of March 2021 and R2.26 billion for the 2020/2021 financial year,” he said. Shawa said it should be noted that while it is the department’s goal to resolve arrears balances, “the monthly billing by municipalities and payments by the provincial departments will continue as government departments provide services to communities in municipal jurisdiction areas. We will continue with our support initiatives to address the highlighted challenges that cause delays in payments,” he said. City of Ekurhuleni (CoE) spokesperson Zweli Dlamini said: “All unpaid debt, inclusive of government and provincial debt, in respect of rates and services rendered by CoE impacts negatively on services delivery to consumers.”

The largest amount owed to the metro was by the Department of Public Works – R42 131 062.98. At least R348 146 537 of the R624m in total debt was for municipal services. The main victim of non-payment is the City of Johannesburg – owed almost R300m.

The City of Tshwane is the second biggest victim of non-payment – owed R204m.

Pretoria News