Kannaland municipality may be put under administration over R12.7m Eskom bill

2016-02-18 13:52
(Gianluigi Guercia, AFP)

(Gianluigi Guercia, AFP)

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Cape Town - The Kannaland municipality in the Western Cape could be put under administration because it cannot pay the R12.7m electricity bill it owes Eskom.

Masizole Mnqasela, chairperson of the provincial legislature's standing committee on local government, said they were cracking down after years of bailing the municipality out.

The last straw was when the municipality applied for a R7.3m loan from Standard Bank, leaving the committee outraged that it wanted to use debt to pay off debt.

It also wanted to use R2m set aside to help extremely poor people.

Mnqasela said if the electricity was cut off, there would be a total collapse of business and 3 000 people would instantly lose their jobs.

It would not just be the municipal offices that were affected, but all of the Eskom-powered residences and businesses in the Klein Karoo municipality.

Enterprises in the towns of Ladismith, Calitzdorp, Vanwyksville and Zoar - which included dairies, cheese factories and some wine growers - would only be able to keep going for three hours on their generator capacity.

To avoid a total meltdown in the already struggling economy, the standing committee resolved unanimously to urgently ask Co-operative Governance and Traditional Affairs Minister David van Rooyen and Finance Minister Pravin Gordhan to put the municipality under administration.

Local Government MEC Anton Bredell and Finance MEC Ivan Meyer would be part of this meeting, set for March 2.

The committee believed the Kannaland municipality had also violated the Public Finance Management Act by applying for a loan to pay off arrears and had violated the Constitution by wanting to use R2m that the province sends it to support the indigent.

"Grants are meant to assist the poorest and most vulnerable residents to access basic services," Mnqasela said.

"As the standing committee, we do feel there is an element of maladministration in this."

He said Kannaland had tried again to offer Eskom the R2m and Public Enterprises Minister Lynn Brown was expected to give her answer on Friday.

He said the request for the municipality to be put under administration, as was the case with Oudshoorn recently, had nothing to do with politics.

Jeffrey Dodson, from the Independent Civic Organisation of SA, is the mayor.

Read more on:    cape town  |  local government

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