Publications
Partners
With the Emfuleni municipality under provincial administration, and a team from National Treasury intervening, it was hoped that the troubled municipality would be turned around. But concerns have been raised about the turnaround plan, and a new survey shows that residents of the municipality are increasingly unhappy.
Emfuleni was placed under administration in June 2018. According to the Department of Cooperative Governance and Traditional Affairs, this was largely because of problems with financial administration and service delivery.
READ: 24 municipalities now under administration
According to the department, the municipality owed its bulk supply creditors R932m at the end of March, and its other creditors R180m. On average, salaries and benefits to the municipality's staff cost about R90m a month. Services have been negatively impacted, creating backlogs in areas including waste management, and water and electricity interruptions have increased, the department says.
READ: Municipalities return millions to the fiscus, while drowning in Eskom debt
A recent survey shows that Emfuleni residents are fed up. According to the Gauteng City-Region Observatory's (GCRO) 2017/2018 Quality of Life report, which measures satisfaction levels of Gauteng residents in various areas of life, the people of Gauteng are more or less satisfied with service delivery.
But Emfuleni residents are bucking the trend, and their satisfaction levels on a number of issues have nosedived in the last two or three years. The report shows that Emfuleni's financial problems are hitting residents where it hurts the most – basic services.
The GCRO reports a "notable decline" in weekly refuse collection across the province, but with a "dramatic deterioration" in Emfuleni. Only 57% of residents in Emfuleni reported having their refuse removed by the municipality once a week. This is compared with the provincial average of 83% of residents. On this score, Emfuleni is the lowest percentage in the province by at least 20%.
OUTA critical of financial recovery plan
Nearly a quarter of Emfuleni residents have no access to street lights and 29% have no access to stormwater facilities – the highest figures on that score in the province. More than half of the people living in Emfuleni have no access to the internet, compared with the provincial average of 38%.
While a municipal financial recovery service unit from National Treasury has prepared a financial recovery plan for the municipality, the Organisation Undoing Tax Abuse (OUTA) says it is not clear enough.
OUTA says there is no clear implementation plan or funding model for a proposed R900m loan. There is also no strategy for municipal infrastructure, which Treasury says is "beyond restoration". Debt, staffing costs, staff vacancies, inadequate collections and billing processes are not addressed by the plan, says OUTA, and it was not put together based on audited financial statements.
According to OUTA's assessment of Emfuleni, which looked at five years' worth of public documents, the municipality's liabilities exceed its assets by R1.35bn. The municipality has a 54% collection rate, owes Eskom and Rand Water R600m and R419m respectively. But 40% of its water is lost thanks to poor infrastructure and theft. Meanwhile, the municipal manager earns R2.2m a year, OUTA says.
National Treasury spokesperson Jabulani Sikhakhane said Treasury welcomes OUTA's comments and will review them.
Sikhakhane said: "It is worth noting that in developing the financial recovery plan, National Treasury consulted relevant parties and the proposed financial recovery plan was also advertised by the municipal administrator together with the Gauteng provincial government. All the inputs received through these processes were considered and addressed in the financial recovery plan."
