On Monday the Democratic Alliance wrote to the Minister of Finance highlighting the financial crisis in Maluti-a-Phofung municipality.
National Treasury issued a final warning to the municipality to comply with legal requirements to rectify its unfunded budget. Should this not be done, Treasury will withhold payment of the equitable share grant due at the beginning of December. The municipality relies on this payment as it is collecting minimal revenue from consumers.
Last week the municipality issued a notice to staff and councillors that salaries would not be paid due to cash flow problems. Staff then downed tools and a water crisis followed due to no water being pumped at the four big water treatment plants. Tankers could also not be deployed to serve the 380 000 residents, as the tankers could also not access water.
Subsequent to the notice some staff have been paid their salaries but contract workers, managers and councillors have not yet been paid. Pumping at most water treatment plants has resumed, and we expect that within a few days the water situation will be back to normal.
The DA has warned since the adoption of the unfunded budget in June that the municipality would run out of money. In terms of the law, council should have also adopted a Budget Funding Plan to indicate how it would ensure funding, this was not done. The Eskom agreement ordered by the Gauteng High Court in June last year, and finally approved by council in September this year, has still not been concluded and implemented. The Minister of Finance in October 2021, ordered that Maluti-a-Phofung municipality be placed under Sec 139(7) National Intervention due to its extremely dire financial situation, and lack of proper governance. The Free State provincial EXCO have failed to do this.
The DA demanded a council sitting to address the financial and water crisis but Speaker Motloung has failed to do so.
It is clear that both the MaP16 coalition government in Maluti-a-Phofung, and the ANC Provincial government have betrayed residents through this outrageous mismanagement, collapse of services, and failure to intervene.
The DA will continue to demand that the municipality be placed under national intervention. The first order of business should be the implementation of the court order with Eskom. This would ringfence the R9 billion debt to Eskom which has crippled the municipality, and ensure a stable electricity supply for residents and businesses.
It is time to acknowledge that there is no longer a Plan B. The community cannot be allowed to continue to suffer under this incompetent administration.