Parliament, Wednesday, 20 November 2024 – The Portfolio Committee on Cooperative Governance and Traditional has applauded the tangible positive improvement in governance and financial position in the City of Tshwane, but it has emphasised that the City must redouble its effort to resolve lingering challenges.
As part of its week-long oversight to the Gauteng province to access the state of municipalities, the committee met the MEC for Co-operative Governance and Traditional Affairs, e-Government, Research and Development, the Executive Mayor of the City, senior management and officials from National Treasury and the office of the Auditor General.
The committee noted that extensive work has been done to resolve the financial challenges that have faced the municipality in the recent past which led to the City improving its audit findings from adverse findings in 2021/22 financial year to a qualified audit opinion in 2023/24 financial year.
“The improvement represents a step in the right direction to ensure a viable and compliant municipality that is able to serve the interests of the people of the capital City, said Ms Dikeledi Direko, the Acting Chairperson of the committee.
Despite this, the committee has urged the municipality to continue with the focused revenue enhancement strategy to improve finances of the municipality anchored on reduction of fruitless and wasteful expenditure and enhanced debt recovery initiatives. The committee raised concerns that the municipality is owed in excess of R27.832 billion which has a direct impact on cash flow management of the municipality.
But the committee is concerned that the municipality has adopted an unfunded budget for the 2024/25 financial year. The concern arises from the financial risk the unfunded budget places on the municipality including the possible increase of debt, poor service delivery, cash shortfalls that can lead to late payments to creditors and limit spending on maintenance and repairs. Despite this, the committee appreciated the relatively high collection rate by the Municipality which informed the committee that it is collecting 94% on average.
Also, the committee welcomed the assurance that the City has entered preliminary discussion with utility company Eskom to thrash out a repayment plan. The municipality plans to pay off arrears of R6.7 billion over the next five years, as well as the payment of future invoices on time. The reaching of an agreement will ensure that the interest is not added on the total debt which will alleviate the pressure on the municipality.
The committee has noted with concern the infrastructure challenges within the municipality that have contributed to high non-revenue water of 34.4% which robs the municipality of much needed revenue for services. “It is concerning that the municipality, like many municipalities across the country, is facing the challenge of illegal connection and vandalisms of the municipal system. Also, the inadequate investment in maintenance of infrastructure and the inability to repair leaks within 48 hours should be addressed immediately in conjunction with stakeholders,” Ms Direko emphasised.
The committee urged the municipality to invest more in infrastructure maintenance as it remains the central pillar of economic development and quality service delivery to the people. Furthermore, the committee is concerned by the increasing challenges posed by mushrooming informal settlements in the City and the undue pressure it places on municipal services. it is unsustainable that the municipality has seen a 174% increase in informal settlements between 2018 and 2024.
The committee has urged the municipality to enhance engagements with the Department of Home Affairs, the Border Management Authority and the South African Police Service in efforts to find solutions to the high number of undocumented migrants into the city.
With regards to Hammanskraal, the committee welcome the assurance that the project is making commendable progress and that some part of the area will have access to clean running water at the end of November. “It is important that the City continues to monitor progress in the implementation of the project to ensure that people of Hammanskraal have access to quality of water.
It is also important that the municipality continues with interventions to test and analyse water at key water abstraction and distribution points,” Ms Direko emphasised. Also, the committee applauded that the senior management team is established with only vacant position of Management positions. The appointment of senior managers enables the strategic implementation of strategies to assist the municipality to overcome current challenges.
Meanwhile, the committee will tomorrow interact with the City of Johannesburg to assess governance and financial management efforts within the city.
Details of the meeting are as follows:
Date: Thursday, 21 November 2024
Time: 09:00
Venue: City of Johannesburg Council Chambers
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE ACTING CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, MS DIKELEDI DIREKO
For media enquiries or interviews with the Chairperson, please contact the committee’s Media Officer:
Name: Malatswa Molepo (Mr)
Parliamentary Communication Services
Cell: 081 512 7920
E-mail: mmolepo@parliament.gov.za
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