News24

KZN municipalities owed R7bn

2010-03-11 08:34

Durban - Five KwaZulu-Natal municipalities were owed over R7bn and there was fear they may be forced to write off R6bn debt which is older than 90 days, Finance MEC Ina Cronje said on Wednesday.

"The debt of the over 90 days category (R6bn) may be irrecoverable and consequently may have to be written off," she said.

Cronje presented the province’s first quarter municipal budget review which covered the financial performance of 58 municipalities during the legislature sitting in Maphumulo on Wednesday.

Inability to collect revenue

She said the eThekwini Municipality was owed R5.3bn, uMgungundlovu Municipality R869.2m, Amajuba Municipality R453.8m, uThukela Municipality R440.9m and iLembe Municipality R376.1m.

The high level of debt reduced the liquidity of the municipalities and funds for service delivery become even scarcer, said Cronje.

"The high levels of debt reflected by municipalities in KwaZulu-Natal is the result of the inability by municipalities to effectively collect revenue for services rendered," she said.

She said 11 municipalities did not generate any revenue from property rates at the end of the first quarter. These municipalities were Vulamehlo, uMzumbe, Impendle, Indaka, Nqutu, eMadlangeni, eDumbe, uMhlabuyalingana, Mfolozi, Maphumulo and Ingwe.

Repairs and maintenance

The provincial government was also concerned that municipalities did not spend money on repairs and maintenance.

"Of concern is the fact that only 8.9% of the reported total expenditure was spent on repairs and maintenance," she said.

The municipalities did not meet the 25% benchmark and only spent 19.2% of the capital budget of R10.7bn allocated for infrastructure projects.

"Only eThekwini Metro (25%) and uMgungundlovu District (20.4%) spent above this average. This is a bone of contention."