By Doreen Mokgolo
The City of Ekurhuleni has fallen R2-billion short of the R18.3-billion in revenue it expected to receive for the 2024-25 financial year.
This was blamed on the low revenue collection rates of R16.3-billion.
The loss was revealed during Thursday’s council sitting at the OR Tambo Government Precinct in Germiston.
The metro owes Rand Water R2.3-billion and Eskom R4.2-billion, as well as contractors who have not been paid for more than 120 days.
The DA has warned this missed collection target will have dire consequences for residents.
Addressing the council, councillor Nqebalethu Tshabalala said the shortfall was largely due to the revenue that was supposed to be collected from the sale of electricity.
“Illegal connections and loss of revenue from the sale of electricity are the main contributors to the shortfall,” he said.
“At the closing of the previous financial year, there were 119 informal settlements; we now have 163 informal settlements which are illegally connected to the grid.
“The missing R2-billion can be traced to that,” he said.
ActionSA’s Michael Basch said collections rates were 82.22% out of the 90% needed.
“We warned Mayor Nkosindiphile Xhakaza that this would be a problem when this budget was adopted,” he said.
“This affects cash on hand down to 11 days out of the 25 required; this, in turn, affects our interest from receivables, which is down by a staggering 80%.”
Basch added that residents are not paying because they are getting less and being made to pay more.
Nkululeko Dunga of the EFF said a shortfall of R2-billion means the metro now has an unfunded budget.
“The low collection rate is due to non-billing and inconsistent revenue collections.
“The ANC-led government failed to manage the finances of the city.
“Truth be told, the money is missing and spent; the people of informal settlements were not part of it,” he said.
Meanwhile, DA councillor Fana Nkosi said inconsistent and varied interim billing, coupled with poor collection, has adversely affected the city’s budget.
“We warned that this missed collection target will have dire consequences for residents but were ignored,” he said.
Pictured above: Mayor Nkosindiphile Xhakaza.
Source: Doreen Mokgolo
