Struggling Oudtshoorn owes R81m to creditors, legislature hears

2016-09-27 22:03

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Cape Town - The struggling municipality of Oudtshoorn owes approximately R81m to creditors, and is owed R115m by its debtors, the Western Cape provincial legislature heard on Tuesday.

Provincial treasury MEC Ivan Meyer and acting chief director for local government Kosie Haarhoff presented a financial recovery plan for the municipality before the Standing Committee on Local Government.

Oudtshoorn was placed under administration in July 2015 and leadership of the municipality has since changed hands from the ANC to the DA following the 2016 local elections in August.

"If we want to turn things around in Oudtshoorn it's important that we must implement this plan and hold the leadership of the municipality to account," Haarhoff told the committee.

The recovery plan was adopted by its council in August, Haarhoff said. It stipulates ten steps to getting the municipality back on its feet financially, including managing its liabilities, job vacancies, service delivery and infrastructure better.

Around R54m of the R115m still owed to the municipality is from households, he said.

Meyer lamented the "dishonesty" of some of the municipal staff's financial declarations after the municipality was placed under administration.

"When you deal with people who are dishonest, you don't get the full truth," he told the committee.

"It was only when we went in there with the administrator and froze the bank accounts that things started coming out."

Meyer said he was able to see how municipal staff were spending money after they were forced to file invoices.

New DA Mayor Colan Sylvester said in August that the party was hoping to get the municipality back on track within three years.

Beaufort West, Kannaland

The standing committee also looked at the municipalities of Kannaland and Beaufort West on Tuesday, both of which are also struggling with financial mismanagement.

Kannaland currently owes creditors R37m while the figure for Beaufort West was still being investigated, the department said.

Provincial treasury and local government have also agreed to offer assistance to the two municipalities via a comprehensive support plan, Haarhoff said.

"We have identified the gaps where they need assistance, and we're going to deploy a team to assist with finance, legal, admin and service delivery matters.

"Many of these new counsellors don't have the expertise, the knowledge or the warm bodies to assist here," he said.

Meyer meanwhile said Kannaland's issues extended beyond mismanagement and that its infrastructure and other factors made it financially vulnerable.

He suggested that the Municipal Demarcation Board look at possibly incorporating it into another municipality to make it financially viable.

Beaufort West, like Oudtshoorn, switched hands from the ANC to the DA in the 2016 local elections following a troubled five years, with the ruling party losing a massive 15% of votes in the region.

Kannaland is currently the only municipality in the Western Cape not lead by the DA following the elections. The Independent Civic Organisation of South Africa (Icosa) retained Kannaland with a 48% minority.

Read more on:    cape town  |  politics  |  local government

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