Civil society organisation Public Interest SA has written to the City of Johannesburg demanding urgent action on the escalating financial crisis.
In the letter it cautioned that failure to meet its demand may lead it to approach the courts to seek remedy.
This comes after Eskom issued a notice of its intention to reduce, interrupt, or terminate electricity supply to certain bulk supply points serving Johannesburg over arrears that have ballooned to R5.2bn. The city also does not have the R10bn for wage increases it promised to workers.
“Further concern arises from recent remarks made by mayor Dada Morero during the state of the city address, wherein it was indicated that the city intends approaching the minister of electricity and energy Kgosientsho Ramokgopa in pursuit of a “political solution” to Eskom’s demands," said Public Interest SA chairperson Tebogo Khaas.
“Public references were similarly made to debt management principles associated with the South African Local Government Association, including the need for robust implementation of municipal credit control policies, consequence management, and approaches relating to irrecoverable debt.”
Khaas said though engagement between different spheres of government remains an important constitutional process, it cannot replace compliance with the law, proper financial accountability, sound financial management, and adherence to the Municipal Finance Management Act.
He added that there is also growing concern about indications that the National Treasury may withhold or place conditions on some funding allocations to the city because of worsening financial governance issues.
According to Khaas, these developments collectively point to a widening institutional and financial governance crisis that could have serious implications for service delivery, electricity stability, investor confidence, constitutional governance and the country’s economic stability.
He said Public Interest SA is acting in terms of section 38 of the constitution, citing its public interest role in promoting accountable governance, lawful administration, constitutional compliance and financial integrity, while protecting the interests of residents.
Khaas demanded that within 14 days the city provide a transparent financial recovery plan detailing its debt to Eskom and other creditors, measures to ensure creditors are paid within 30 days, repayment timelines, and protection of electricity revenue.
He further asked the city to provide steps to curb wasteful expenditure and consequence management against officials implicated in financial misconduct.
The plan must also outline measures to strengthen financial controls, improve oversight and accountability, and disclose the status of the municipality’s financial management systems.
The city has been urged to begin implementing the corrective measures immediately and no later than 30 days after the memorandum was issued.
Khaas warned that failure to act could expose current and former officials to disciplinary, civil and even criminal action.
“Public Interest SA reserves the right to approach a court of competent jurisdiction for appropriate relief, including the institution of civil and other proceedings against the city and implicated officials, to give effect to the demands set out herein.”
Sowetan
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