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Free State municipalities on brink of financial collapse

SABC News Eskom 6 - Free State municipalities on brink of financial collapse

Several Free State municipalities are on the brink of financial collapse due to mounting debts running into billions of rand. Municipalities in the province owe water boards almost R4 billion.

The Eskom debt stands at more than R10-billion.

In the Mangaung Metro alone, the debt balance from government, business and households, is more than R4-billion.

Free State Cooperative Governance head, Mokete Duma says the prevailing situation is concerning.

“The issue of revenue enhancement and collection is a serious challenge. We’ve made our own analysis, as the department. For instance, just to cite an example, in one municipality you will find that the bill says R10 million and when you check at what they are able to collect. More often than not, it’s less than R2 million. So, it’s a very serious challenge because the collection ranges between 13% to sometimes, when they are lucky 20%. So, who must then fund 80% that is there?”

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