The Ditsobotla local municipality in North West has conceded that its failure to maintain public infrastructure resulted in Clover SA closing down its plant and moving it to another province.
Clover SA this week announced that it was closing the country's biggest cheese factory and moving it from North West's Lichtenburg to KwaZulu-Natal.
Relations between the municipality and the company soured following problems relating to poor road infrastructure, water shortages and constant power outages.
"Ongoing poor service delivery is the main reason for Clover's decision to move its cheese production from Lichtenburg to Queensburgh, Durban. Clover already has operation in Queensburgh and the eThekwini municipality has proven to be supportive," read the company's statement.
According to media reports the move will cost the company R1.5bn and result in more than 300 jobs being lost.
"For years, the Lichtenburg factor has been experiencing water and power outages and the surrounding infrastructure has not been maintained by the municipality. Despite numerous efforts to engage the municipality on these matters, the issues have not been resolved," said Clover.
Speaking to SowetanLIVE on Tuesday, Ditsobotla mayor Tebogo Buthelezi confirmed that Clover had for years raised complaints about the poor public infrastructure in Lichtenburg.
"This is a very big blow to Ditsobotla municipality and its communities," said Buthelezi.
"It is true that Clover has been raising [the issues for many years]. Those [problems] have been accumulating for quite some time and now it is just unfortunate that we are at a point of no return due to poor infrastructure," said Buthelezi.
Buthelezi said the municipality was struggling to fix public infrastructure as most of the residents of the municipality, formed after the merger of Lichtenburg, Coligny, and Biesiesvlei, were hell-bent on not paying for municipal services.
"Due to this low revenue collection rate we [unsuccessfully] requested the assistance of the department of public works to finance the revamping of the road leading to the Clover industrial side. The road is totally worn out. It cannot be patched. It needs to be reconstructed from the ground," he said.
Buthelezi said he even raised the issue of funds at a provincial government meeting last year and the government was in the process of obtaining the funds.
It is true that Clover has been raising [the issues for many years]. Those [problems] have been accumulating for quite some time and now it is just unfortunate that we are at a point of no return due to poor infrastructure
He stopped short of saying it would be sad to see the company leave because Clover had been assisting the municipality with technicians whenever there were water problems. "Clover also assisted the municipality whenever there were issues regarding electricity transformers.
"The district is busy at the moment trying to install the water lines in the municipality with an aim to supply the local communities and Clover," he said.
"I must be honest with you, when the water is not there, Clover is losing a lot of money. They need water to process their product."
Buthelezi said the shortage of funds stems from the municipality only being able to collect revenue from three of its 20 wards.
He said the municipality collected between R20m and R22m a month.
"The salary bill runs at R14.5m a month. There is under-collection of revenue and there are also illegal connections of both water and electricity," he said.
Buthelezi said the municipality needed to collect at least R45m a month to be able to maintain its public infrastructure.
He said the other challenge was that Ditsobotla experienced a high turnover regarding its accounting officers. "We have had 10 municipal managers since 2016. As soon as the municipality becomes stable, a municipal manager would resign," he said.
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