Free State municipality battling to pay debtors puts out R1m events tender

2018-12-21 18:31


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A cash-strapped Free State municipality has advertised a R1m tender to host events amid allegations of bankruptcy.

Dihlabeng Local Municipality owes more than R250m to entities including Eskom and the provincial government garage.

Last week, the three-year event hosting a tender with a January 14, 2019, deadline was advertised.

The municipality, which includes areas such as Bethlehem, Paul Roux, Clarens, Fouriesburg and Rosendal, claims it is not bankrupt, but faces liquidity challenges.

READ: Hawks swoop on two Free State municipalities in R56m corruption probe

A source at the municipality who did not want to be identified claimed that there have been months where workers were not paid on time.

On December 16, Dihlabeng contributed R 350 000 towards a music festival held in Bethlehem.

Waste collection affected

The source added that service delivery at the municipality had been "severely affected" by the situation.

"Two garbage removal trucks have been taken away by the provincial government garage, forcing the municipality to battle to collect waste refuse. People have now resorted to dumping waste everywhere. Service delivery is severely affected. Our municipality is in serious debt and failing to pay salaries on time," said the source.

Spokesperson Tshediso Maitse said Dihlabeng municipality was experiencing liquidity challenges, not bankruptcy.

He confirmed that the municipality owed Eskom more than R165m. Its debt with the provincial government garage was R60m and it had budgeted R1m for its events.

"The municipality is financially stable. The municipal workers get paid on time each and every month. The municipality has a payment arrangement with Eskom with the goal to service the current account and settle the arrears. The municipality is financially stable," he insisted.

Regarding the music festival, Maitse said it was part of the municipality's youth development and social cohesion programme, which was also part of service delivery.

DA blames ANC

The Auditor General found that during the year ending June 2017, Dihlabeng incurred a net loss of over R74m compared to R54m in 2016.

The municipality's current liabilities exceeded its current assets by R245m in 2017, an increase from just over R172m in 2016.

Unauthorised expenditure escalated from R78m in 2016 to R83m in 2017. Fruitless and wasteful expenditure also increased from R11m in 2016 to R22m in 2017 due to penalty charges on late payments to suppliers and the South African Revenue Service.

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DA leader in the province Patricia Kopane said blame should be laid at the door of the ruling party for its failure to appoint qualified people to run municipalities.

Kopane said the rot was not only at Dihlabeng but in all municipalities across the Free State.

"The municipality is among many known for spending money on events instead of service delivery. If it is serious about service delivery, it should stop spending money on hosting events. The ANC is using municipalities as its cash cows, especially when it hosts events related to elections.

Opposition 'playing politics'

"Today, many municipalities in the Free State are collapsing. Service delivery doesn't exist. The only solution [is for] people in the province to stop voting for them. What is happening at Dihlabeng is the tip of the iceberg," she said.

READ MORE: EXPOSED: ANC secretary general Magashule and daughter involved in dodgy R150 million RDP housing scam

EFF chairperson in the province Mandisa Makhesini also echoed the DA's sentiments.

"The leadership of the municipality doesn't put its people first. They prioritised unnecessary things such as events instead of rendering services. They promised us that they will settle all their debts within 10 days and we are still waiting. Money used for a music festival should have been used to change people's lives.

"The municipality doesn't serve our people at all, but focuses on party events," said Makhesini. 

ANC Free State spokesperson Thabo Meeko claimed the opposition parties were "playing politics".

"It is clear that they are playing politics here. We are aware that some of the municipalities are faced with challenges and working hard to fix the situation," he said.

Difficulty generating revenue

Meeko added that the December 16 event was part of a youth celebration and was funded mostly by private parties with the municipality making a contribution.

"As the province we are engaging with all municipalities in the province through financial management. We meet from time to time and, thankfully, national government is coming on board to assist many municipalities in the province.

"People must remember that most of our municipalities are based in rural times, where it is difficult for them [to] generate revenue through payments of rates and services because many of our people are unemployed."

Meeko said the ANC wanted to help rescue all affected municipalities. He vowed the party would not tolerate the non-payment of workers, third party benefits and salaries. 

Read more on:    anc  |  bloemfontein  |  service delivery  |  corruption

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