Emalahleni owes Eskom R560m but spends R20m on bodyguards

2015-04-26 15:00

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A municipality in Mpumalanga has not settled its R560?million electricity bill – but has forked out about R20?million a year on bodyguards for its senior managers.

Emalahleni is one of 20 municipalities throughout the country that power utility Eskom is threatening to cut off due to its failure to settle its debt. Combined, the 20 delinquent municipalities owe Eskom R3.68?billion in debt older than 30 days.

Emalahleni acting municipal manager Theo van Vuuren – who was the municipality’s administrator for two years until March 31 – confirmed that close to R50?million had been spent on security in the past two years.

Although Van Vuuren said the money was also spent on asset protection, team operations and special investigations, City Press obtained financial statements last year that showed R20.3?million was paid to Guardian Concepts International from February 28 2013 to May 21 2014 for bodyguards alone.

The bodyguards were hired to protect Van Vuuren and senior managers after SA Municipal Workers’ Union members bundled then municipal manager George Mthimunye out of the municipal building and took him to the “people who deployed him” at the ANC Nkangala regional offices on February 14 2013, because they alleged he was corrupt.

Guardian Concepts terminated its contract with Emalahleni in December after its owner, Verne Clarke, pleaded guilty in the Witbank Magistrates’ Court and before the Private Security Industry Regulatory Authority’s tribunal to operating without registration.

Emalahleni and Bushbuckridge were placed under provincial administration in April 2013 following the collapse of service delivery. When a municipality is placed under administration, the province or national Treasury takes over its running – including financial management – and appoints an administrator, who runs it until such a time that it is stabilised.

Defending the hiring of bodyguards, Van Vuuren said “increased security” would not have been necessary if the operating environment had been stable. He indicated that senior managers still needed protection.

“The continued need for security deals with asset protection, staff protection, team operations and special investigations. It is foreseen that this need will still be there for the foreseeable period of time,” he said.

Van Vuuren indicated that R44?million had been spent to date. “There are different security contracts in place and, in total, a further R24?million has been spent [since May 21],” he said.

Consumers owed the municipality R1.5?billion for electricity, with households the biggest culprits with debt of R1.1?billion, according to Van Vuuren. Businesses owed R160?million.

When Van Vuuren took over as administrator, Emalahleni owed Eskom R204?million. The debt has more than doubled since.

But Van Vuuren said if the municipality had paid all its income to Eskom, service delivery would have come to a standstill.

“Despite all efforts to pay Eskom, the account increased per month as a result of an under-recovery on electrical bills from consumers. On average, only 60% of the monthly Eskom bill to the municipality can be billed to end users?... mainly as a result of an incomplete information base, large-scale bridging of meters and illegal connections.

“From the amount billed to end users, a low payment rate was also being experienced,” Van Vuuren said.

Under Van Vuuren, the municipality has also continued to get disclaimers from the Auditor-General – a situation he blames on poor data systems and record-keeping, a weak financial position, understaffed internal audit and financial units and insufficient senior management.

Premier David Mabuza announced two years ago that municipal managers who received disclaimers should resign voluntarily or be fired, and he made them sign letters undertaking to do so.

Mabuza’s spokesperson, Zibonele Mncwango, did not respond to written questions about Van Vuuren’s appointment as acting municipal manager after his contract as administrator lapsed last month.

An Emalahleni staff member, speaking on condition of anonymity, said: “Nothing has improved since we were placed under administration.

“When payday approaches, we’re not sure we will be paid.”

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