Gauteng municipalities to breathe a sigh of relief

Monday, September 7, 2009

Johannesburg - Gauteng municipalities buckling under pressure from the current global financial crisis could soon breathe a sigh of relief.

That is if the Gauteng Provincial Government's plans to help municipalities facing financial problems gets the thumbs-up from the Provincial Cabinet.

Addressing the media on the first 100 days in office on Monday, Local Government and Housing MEC, Kgaogelo Lekgoro said the 'measures would help municipalities when it comes to revenue collection'.

While acknowledging that there were 'problems in terms of revenue collection' by municipalities, MEC Lekgoro said this did not amount to bankruptcy.

"Municipalities - like every going concern - are affected by the downturn in our economy. When consumers' ability to spend is affected; that is immediately felt by municipalities on the rates, taxes and services.

"We are examining the financial viability of all our municipalities and will provide a report to our EXCO Lekgotla next week.

"All indications are that, yes there are difficulties of cash flow management as a result of the economic downturn and of cause in other cases; as a result of inefficiencies and mismanagement," the MEC said.

Except for the Nokeng Tsa Taemane Local Municipality, it is not immediately obvious that any municipality is facing bankruptcy.

The MEC said the department had put a Debt Structuring Model before the Executive Council for consideration.

"We hope this will enable us to enhance our revenue collection and put municipal financials on an even better footing," said MEC Lekgoro.

Meanwhile, the department is forging ahead with plans to address the housing backlog in the Province.

MEC Lekgoro said "housing remain(ed) the cornerstone of our service delivery efforts". To this end, the government had embarked on several initiatives turn old townships into habitable human settlements.

"We are jointly, with the local government of Ekurhuleni, concluding working agreements on how, together, in the coming five years (we) are going to upgrade and turn Tembisa into a human settlement.

"We are putting a joint effort with the City of Johannesburg to accelerate to the areas of the south (that is, Orange Farms, Lenasia etc). The problem here is formalization of the areas, bulk services and houses. We are determined to make a difference," said MEC Lekgoro.

It was also reported that under the Alexandra Renewal Programme, 204 of the 282 houses meant for hostel dwellers had been completed and are already occupied. The balance would be completed during this financial year.

The MEC said work was underway to re-incorporate Merafong back into Gauteng. An inter-departmental team was sent to the area to assess the immediate needs of that community.

The assessment is then used to guide the different departments on how to direct their interventions.