Our Burning Planet


Municipality owes Eskom more than R1bn, say those seeking to dissolve it

Municipality owes Eskom more than R1bn, say those seeking to dissolve it
Protesters in Komani in the Eastern Cape during a day of action to shut down economic activity in the town on 16 February 2022. (Screenshot: Twitter / Ronald Masinda)

The Komani-based civil society organisation Let’s Talk Komani and the Independents party, which have asked the Makhanda High Court to dissolve the Enoch Mgijima Local Municipality, say the council has failed to implement its own financial recovery plan.

It’s a “very simple mathematical problem”, says Ken Clark, one of those involved in a court application to dissolve the Eastern Cape’s Enoch Mgijima municipality, which is deeply in debt

Clark, a member of Let’s Talk Komani and a councillor for the Independents, told Daily Maverick they had resorted to asking the courts to dissolve the municipality because it had not complied with previous court orders instructing it to implement the financial recovery plan.

The municipality’s struggles are not new. Let’s Talk Komani filed the original application to dissolve the municipality in 2019. And in February this year, residents of Komani took to the streets, bringing the town to a standstill, demanding that the national government dissolve the municipality.

Citing its debt to Eskom, Clark said the municipality owed the power utility about R300-million before Covid-19.

“That amount now is over R1-billion and it is increasing at a ratio of between R20-million to R30-million per month. The municipality continues to do nothing to recover the monies owed to it,” he said.

Clark said the municipality overspent on salaries and wages, and as a result had little or no money left to provide services to its citizens.

“This is a very simple mathematical problem and one which the municipality is not prepared to attempt to resolve… I believe that we had no option but to ask the courts to act and the ministers concerned to take the necessary actions that the Constitution demands,” he said.

Among the 16 respondents are Eastern Cape premier Oscar Mabuyane, the Eastern Cape executive council, MEC Zolile Williams, Minister of Cooperative Governance and Traditional Affairs (Cogta) Thembi Nkadimeng, the National Council of Provinces, Minister of Finance Enoch Godongwana, President Cyril Ramaphosa and the Enoch Mgijima municipality.

Council to fight court application

In a special meeting on Monday, the municipality said it would oppose the application to dissolve the council. According to the council agenda, the municipality was served with court papers on Wednesday, 12 April 2023. 

Mayor Madoda Papiyana said it was unfortunate that people, including elected councillors, were hellbent on disrupting all service delivery initiatives. 

“It is clear that the same councillor and his organisation will continue disrupting all planned projects aimed at improving the lives in Enoch Mgijima,” he said.

Read more in Daily Maverick: Enoch Mgijima Municipality eyes solar power to solve its electricity crisis

Speaker Noluthando Nqabisa said the council would establish an ad hoc committee to investigate the conduct of councillors. The council also resolved that the municipal manager should appoint attorneys to represent the municipality in the court case.

Constitutional obligation

In his founding affidavit, Clark said the court application sought declaratory orders declaring that the municipality had not met its constitutional obligation in terms of sections 152(2) and 153 (a) of the Constitution, by failing in its administrative and financial capacity to provide services to its community in a sustainable manner.

“We seek an order directing the national executive represented by the President Cyril Ramaphosa, who is the 15th respondent, [and] the provincial executive to dissolve Enoch Mgijima municipal council in terms of section 139 (5) (b) of the Constitution and to take the steps envisaged in that section,” the affidavit said.

Clark said the municipality had consistently failed to provide the services required of it.

“It has also been in a persistent financial crisis for a considerable period of time. As a result, the provincial executive has intervened in the administration and operation of the municipality by appointing an administrator and by preparing a financial recovery plan for implementation in the municipality,” he said.

He said the implementation of the recovery plan and the tasks of the various administrators had been frustrated by the deliberate actions of the municipal council and the municipal executive. 

“As a result of the failed interventions by the provincial executive, the national executive, as it is required to do, has intervened and assumed responsibility for the implementation of the recovery plan and the administration of the municipality. The national executive’s attempts have also been frustrated by the efforts of the municipal council and the municipal executive,” Clark said.

According to Clark, in circumstances where a municipal council is frustrating the implementation of a recovery plan and an intervention, the Constitution generally provided both the provincial and national executive with the power, and imposed on them the duty, to dissolve the municipal council.

“The failure to comply with this duty has given rise to this application,” he said.

Clark said that in 2018, the Cogta MEC Fikile Xasa invoked section 139 (1) (b) and section 139 (5) of the Constitution to intervene in the affairs of the municipality and to appoint a team of financial experts.

Read more in Daily Maverick: Why an Eastern Cape municipality that owes Eskom R890m cannot foot its electricity bill

“A financial recovery plan was duly prepared and an administrator, Vuyo Mlokothi, was appointed in September 2018 for a period of six months, which was renewed for a further six months in March 2019. In his report, Mlokothi identified significant instances of unauthorised expenditure in respect of, inter alia, council members and in respect of enrolment fees, travel and accommodation,” he said.

Clark said Mlokothi’s personal safety was at risk and he had recorded that he had received various threats to his personal well-being.

“Mlokothi recorded that the implementation of the recovery plan was undone in March 2019 when the municipal council voted to remove Mlokothi as an administrator,” he said.

Original application

Clark said Let’s Talk Komani launched the original application for the dissolution of the municipal council in 2019, as the municipality was beset by a number of serious crises, which included:

  • A financial crisis which was exacerbated by the fact that almost the municipality’s entire revenue was spent on payroll;
  • A crisis of corruption and a lack of internal controls within the municipality;
  • An electricity crisis;
  • Waste collection was intermittent and the waste dump was not managed, resulting in it often burning, spewing toxic fumes into the air for days; and
  • Municipal services such as fire-fighting and control of roaming animals were non-existent.

Clark said that, as of July 2022, the Eskom debt had risen to a staggering R825,400,000. 

“Moreover the load shedding implemented by Eskom, taken with the unmaintained infrastructure, often leads to power outages for days and sometimes weeks for the citizens of the municipality. Other than Eskom the municipality is indebted to creditors in a sum exceeding R720,000,000 and is unable to pay its creditors within 30 days as it is required to do,” he said.

Clark said revenue collection rates were woeful, further exacerbating the municipality’s ability to deliver services and to pay its creditors.

“Only 55% of citizens have access to refuse removal, roads are in a state of horrendous collapse made worse by the recent floods in the municipality,” he said.

‘Absolutely counterproductive’

The DA’s Enoch Mgijima constituency leader, Jane Cowley, said the party still needed to drill down to find the source of the malfeasance, mismanagement and financial mismanagement so that structures could be put in place to prevent it in future.

“The national Cabinet representative, Dr Monde Tom, answers to the Cabinet, which means he has to compile a report and we would like to know when this report is going to be made available. Only then can anybody make a just and fair assessment of the situation. Only then can we decide whether we should go for a dissolution or not,” she said.

Cowley said it might well be that Cabinet itself decided to dissolve the municipality.

“Let us get this process finished. First, let us see what the report says. Let the Cabinet view the report, let us view the report and then we make an informed decision about whether we must push for the dissolution of the Enoch Mgijima municipality based on that report. But trying to run another process while this process is still under way is, to me, absolutely counterproductive. “

“And at the end of the day it is going to cost the ratepayers more.” DM

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