The City of Tshwane has conceded that it is battling to stay afloat due to financial difficulties.
The metro is faced with many financial challenges which include paying service providers. Earlier this month, the Auditor-General flagged the metro as the worst performing in Gauteng and the highest contributor to irregular expenditure of R2.7 billion.
The metro, which is run by the DA through a coalition government, was downgraded by rating agency Moody’s last year. The Tshwane Bus Rapid Transport, which runs the Areyeng bus services, was owed over R100 million after the city defaulted on payments for five months.
Recently, security guards and revenue collectors protested outside the City’s headquarters over non-payment. Earlier this month, the City paid Eskom R840 million after defaulting for months.
Finance MMC Peter Sutton says the metro has serious liquidity challenges, “We are in a challenging state and it’s not only the administration process but it’s also the COVID disaster management it had on people. At the moment we have serious liquidity challenges, we are battling due to our collection, our payment levels are very low from what we need them to be and we are not recovering our money. There has been a high debtors book flagged by the AG and various other of our issues which is putting a lot of strain on the City of Tshwane at the moment.”
Defaulting customers in townships
Earlier in July, the City said it will start pursuing township customers whose accounts are in arrears, as part of its revenue collection programme.
The City said it is finalising logistics to pursue defaulting customers made up of residents, businesses and government departments whose accounts are in arrears.
Township customers throughout the City’s seven regions owe R7.3 billion with Mamelodi and Nellmapius customers incurring the highest debt of more than R2.1 billion.
This is followed by Soshanguve customers who owe the city over R1.1 billion.
City spokesperson Selby Bokaba says they are also monitoring illegal connections.