THE NEW AGE: R300m Eskom bill worrying in Northern Cape

The Northern Cape provincial government says its housing backlog reduction is advancing well but it has to make sure that 32 municipalities pay the R300m electricity bill they owe to Eskom.

Last Monday, the human settlements MEC, Alvin Botes, promised to build 2300 houses worth R100m for the population of the Northern Cape in this financial year. He has, however, not been able to turn around the situation at five of the worst municipalities in the province.

His goal is to turn that around. Botes said the landscape of housing in the province does not look too good with a backlog of 52000 houses which must still be built. Botes said the old system of issuing houses on a first-come first-served basis was not working and they needed to look at the disadvantaged first.

Botes said his department would be using the database of the department of social development Balepile social profiling to help them do a means test, to determine who deserves a house. “We are using an integrated residential development programme which is a form of RDP houses will, however, go hand in hand with the new housing policy.”

Botes said the IRDP marked a fundamental departure from the way in which housing projects were planned and implemented in the past. He said the allocations would be made in stages, those who cannot afford rent at all, those with disabilities and those who are able to rent but can’t afford to buy.

Botes said the new houses will be given to people over the age of 40, but preference will also be given to the disabled, the child-headed households and the extremely impoverished. He also said that opportunities will be given to those earning between R3500 and R15000, those who do not qualify for RDP houses but also do not qualify for bonds.

Although the department wants to build these houses and ensure that the province is given the necessary infrastructure support, there is no surety that lights in those houses will stay on. Last week, Eskom issued notices in various media threatening to cut electricity at five municipalities in the province, including Dikgatlong, Renosterberg, Thembelihle, Magareng and Ubuntu.

The municipalities which collectively owe Eskom R88m in debt are getting financial support from the department. The total debt owed by the 32 Northern Cape municipalities to Eskom is R303 695 524. Botes said they deployed the right skills to the respective municipalities to help them pay off their debt and correct their financial situation.

“It’s only the five out of all 32 municipalities that are failing to agree to their contractual obligations.” Botes said they deployed a municipal manager to Dikgatlong local municipality and appointed a full time chief financial officer to Renosterburg to assist the ailing municipality.

He said that Thembelihle municipality has not yet mentioned its level of distress and as such has yet to ascertain remedial actions available.

Botes said that to disconnecting electricity can have severely detrimental effects on the residents of those areas and according to him, the majority of the citizens in those areas cannot afford to pay for services.

He also said that citizens who can afford it should be forced to pay for services and those who cannot afford to pay be placed on the indigent register. Meanwhile, Botes said they had made strides to ensure that the power in Dikgatlong stays on, Renosterberg and Thembelihle remain connected.

“Ubuntu municipality is still in engagements with Eskom on the possibility of being removed from the disconnection list. It is worth noting that in this particular municipality, Eskom owes the municipality 2.5% profit margin that is supposed to be transferred to the municipality by Eskom by virtue of its participation in the Solar-Wind Farms,” the MEC said.

“We thus urged Eskom to pay the municipality its percentage and convinced the municipality to pay Eskom what’s due to it,” he said. However, Thembelihle municipality has been rejected by Eskom due to affordability as the municipality has not yet entered into a payment agreement. “The lack of leadership in this municipality is worrying and we have summoned the Thembelihle leadership to the MEC’s office,” Botes said.

However, this is not the only municipalities where the MEC has had to intervene. Last week, the auditor-general did not get a welcome reception at the Hantam municipal offices when the MEC took control. Botes said the municipal leadership barred the auditor-general from entering the offices of the municipality on January 19 as they are not happy about the outcome of the auditor-general’s report.

Botes urged the auditor-general to go to the municipality and sit in at council meetings until the municipality decides to act. Botes said his department made an assessment into the report of the auditor-general and came to the realisation that the municipality had regressed from an unqualified audit opinion to a qualified one.

“The municipality felt unduly treated in terms of the audit outcome but when we assessed the report, realised that the municipality migrated downwards. The municipality moved from unqualified to a qualification and now they are putting up a fight with the auditor-general. “We are in consultation with the state law advisers to determine steps we can take to deal with this matter. If this matter continues, we will have to place an interdict on the municipality as this act is unconstitutional.”

Botes said the municipality had unauthorised expenditure of R499023 and had multiple contraventions of the municipal financial management act, supply chain policy and preferential procurement acts.

“A letter has been sent to the municipality to sensitize them about the importance of the office of the auditor-general. Failure to allow the auditor-general to present the audit report to the council will leave us with no option but to inform the public about the audit outcomes.”

He also said material amendments and corrections had to be made to the financial statements, as originally compiled by the municipality, were incomplete and inaccurate and that business contracts of the municipalities were awarded to family members of the municipal employees. Read more here