Premier Must Deal With Non-Payment to Municipalities

Bobby Stevenson MPL

DA Eastern Cape Leader in the Legislature and Shadow MEC for Finance

If Premier Noxolo Kiviet is serious about statements made to the media about dealing with non-payment by provincial departments to municipalities, she should deal with the provincial officials responsible rather than suggesting municipalities cut off provision of services to departments if they have not paid. For the Premier’s statement, click here. The Premier is correct in highlighting this critical issue, but she should not use municipal cut-offs as the stick to beat provincial departments into action. Rather she should crack the whip to ensure that her own officials perform. The growing arrears by departments to the Nelson Mandela Metropole is a case in point. This amount has increased by R1, 5 million between June and July 2012. National and provincial departments owed the Nelson Mandela Bay Metropole in the region of R77 million as at 31 July 2012. This is a combination for outstanding municipal services (R27, 528 million) and an estimated R50 million that is still outstanding by the Health Department for services rendered by the municipality on their behalf. Out of the R27 528 million, R19, 554 million is owed by provincial departments and R7, 973 million is owed by national departments. The Nelson Mandela Metro Municipality is cash strapped and currently has only a 20-day cost coverage, where the ideal situation should be 90 days. When provincial and national government are slow payers it compounds the cash flow crisis in municipalities. When one looks at the huge backlog in infrastructure development which has been estimated at R42 billion in this province and the need to deliver services, the ability of municipalities to perform cannot be retarded in any way, particularly by trickle-down payments by national and provincial departments. They should be setting the example. I have today tabled a question to Premier requesting she spell out steps of how she will ensure that departments speed up payments to municipalities. A DA-led provincial government would ensure that all service providers, including municipalities, would be paid within the norm of 30 days.

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