Council denies crisis

2010-11-23 00:00

UGU District Municipality Mayor Sithembiso Cele has acknowledged the financial challenges facing the council, but denied that the Ugu District Municipality (UDM) is in the midst of a dire financial crisis.

Cele clarified the financial position of the council at an executive committee (Exco) meeting held last Thursday, indicating that the financial status of the municipality has been distorted by certain individuals and the media.

“Yes, it is true that our liabilities exceed our assets, but this has been blown out of proportion and we were reported as being in deep financial crisis,” said Cele.

“What has really happened is that there are people who have gone all out to distort this with the incorrect facts, because the situation has not been as dire as it has been said to be.”

Cele said they are doing everything to normalise the situation as they have a loan of R60 million coming from the Development Bank of Southern Africa (DBSA).

He said that while waiting for the money owed to the council to be paid out, the UDM used internal funds amounting to R40 million to pay bills.

He said they are waiting for claims from the SA Revenue Service to the amount of R20 million, while R15 million will come from Umgeni Water.

According to Cele, all this money is expected to be paid to the municipality by November 30.

Ugu finance portfolio chairperson Dr Samson Nyawuza said the municipality has an investment of R157 million, so there is no way that it can be reported as being bankrupt.

He said that an amount of R66 million for equitable shares from the national government has not been received.

“How can we be deemed cash-strapped when we have got funds coming to our coffers?” asked Nyawuza.

When asked about councillors and employees who owe the council money, Ugu chief financial officer Ved Hukum explained the money owed is mainly for municipal rates such as water and sanitation.

“Councillors owe only R80 000. Employees owe the council R140 000 for water consumption rates,” he said.

The outstanding money from employees and councillors is expected to be paid by the end of the month as the municipality intensifies its plan to collect all funds due to it.

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