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DA welcomes lifeline for bankrupt Maluti-a-Phofung Municipality

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DA welcomes lifeline for bankrupt Maluti-a-Phofung Municipality

14th January 2021

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The Democratic Alliance (DA) welcomes a proposal tabled in the council of the Maluti-a-Phofung Municipality (MaP), whereby Eskom proposes to manage the electricity affairs of the municipality. This would ensure that the critical upgrade of infrastructure can take place, and that business investment, economic growth and job creation can be unleashed in the municipality which boasts the highest debt owing by any municipality in South Africa to Eskom currently standing at R5,57 billion as at 1 December 2020.

The proposal from Eskom would include a R1,5 billion investment in electricity infrastructure which Eskom deems to be in a life threatening state, the collection of revenue through billing and pre-paid sales, and would eliminate the huge debt burden within the fifteen year period of the proposed contract. Electricity staff and existing pre-paid vendors would also be retained under new terms.

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Many residents and businesses of Harrismith have been without electricity since New Year’s Day and are desperate to take their power back from the collapsed municipality. This is already evidenced by the 100 largest electricity users in MaP who are paying their bills directly to Eskom as per their court agreement. The electricity failures of the municipality also often impact on the water pumping stations and the water treatment plant in the municipality, leaving residents with no water.

Today we learnt that outside contractors have been appointed to rectify the chaotic electricity crisis in Harrismith, and hope that within a day or two our electricity supply will be restored to relative normality.

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Whilst Deputy President David Mabuza is in support of this proposal, it remains to be seen whether the ANC in council will embrace this opportunity to rescue the municipality, and will show the political will to sell the plan to communities who have become accustomed to a failed municipality.

The Special Economic Zone (SEZ) that has the potential to promote investment and job creation for the area depends on sound municipal services and infrastructure in MaP. The Western Cape has used SEZ’s to boost local economies and job creation, something that has eluded the Free State due to the conditions in the MaP municipality.

The lesson to be learnt from our experience in MaP is that not budgeting for maintenance of critical infrastructure, non-collection of revenue, and general mismanagement which is supplemented by corruption will eventually lead to the total collapse of governance, prevent investment and job creation, ultimately making poor people poorer. Residents of MaP deserves a DA government which cares and is people centered and in this year’s local government elections, have that opportunity to vote for good clean governance.

 

Issued by The DA

 

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