Ekurhuleni owes R7.3 billion but only has R2 billion left

Gauteng MEC Nkululeko Dunga reveals the city owes Eskom R5.7 billion and Rand Water R555 million as of 31 May amid a cash crisis. The City of Ekurhuleni is in a serious financial crisis and failing to pay its debts. This is according to Gauteng MEC for finance Nkululeko Dunga, when responding to DA questions in the provincial legislature. Dunga reveals Ekurhuleni owes Eskom R5.7bn and Rand Water R555m The city owed a whopping R7.3 billion as of 31 May – but the municipality only has R2 billion in its bank account. Dunga said Ekurhuleni owes Eskom R5.7 billion, Rand Water R555 million, provincial government departments R293 million, municipalities R4.4 million, suppliers of goods and services R91.3 million and contractors R669 million. Khathutshelo Rasilingwane, DA mayoral candidate, said it was disappointing to see the money in the account would not cover even half of the debt owed to creditors. “Some service providers have been owed payment for more than 120 days. This is because of corruption, mismanagement, and maladministration of funds under the watch of Gauteng premier Panyaza Lesufi’s government.” Rasilingwane said the corruption exposed at the Madlanga Commission of Inquiry was one of the reasons why residents struggle to access basic services. Had the proper procedures been followed and consequence management implemented, this would not have been the case. “Failing to pay Eskom and Rand Water on time may result in limited services. This means that residents may be subjected to power cuts due to load reduction and have their water supply throttled,” Rasilingwane said. DA requests urgent meeting with mayor “The DA Gauteng will be writing to the mayor of Ekurhuleni, Nkosindiphile Xhakaza, to request a meeting within seven days regarding the current state of the city’s finances.” Wayne Duvenage, CEO of civil action group Organisation Undoing Tax Abuse, said the financials from Ekurhuleni, the City of Joburg and others “provide compelling evidence of a serious cash flow and financial management crisis”. “That is why they cannot pay bulk suppliers and contractors within agreed terms. As a result, service delivery, infrastructure maintenance and the local economy are all placed at risk. “This has everything to do with a leadership and competence crisis, the by-product of the ANC’s cadre deployment strategy,” Duvenage said. “To change this, there needs to be zero political interference and the best people on merit should be appointed to administration positions, not friends and family.” In the upcoming local elections, residents have a choice to either elect the same parties that have placed the city in that position, or a new party that can make a difference, he said. Theo Neethling, of the department of political studies and governance at the University of the Free State, said Ekurhuleni’s deteriorating financial position has become another stark reminder of the governance challenges confronting local governments. Challenges confronting local governments “Responsibility ultimately rests with those entrusted with governing the municipality. The city is administered by an ANC-led government of local unity coalition, including the EFF and the Patriotic Alliance. “This coalition bears primary political responsibility for the municipality’s strategic direction and financial management.” Neethling said opposition parties have rightly consistently argued that coalition instability, political bargaining and prolonged disputes over governance have undermined effective decision-making. He cited repeated failures to pass the municipal budget before a compromise was reached. The administrative leadership must also account for the financial decline, Neethling said. Successive reports by the auditor-general have highlighted serious weaknesses in financial controls, procurement systems and supply chain management. “The municipality continues to struggle with unauthorised, irregular and wasteful expenditure amounting to billions of rands, while operational losses from electricity theft and distribution inefficiencies further erode its financial position. “These administrative shortcomings suggest systemic failures that extend beyond political leadership alone,” Neethling said.