Despite eThekwini Municipality having Investments to the value of R9.4 billion it now has a negative credit rating as a direct result of the introduction of a section 154. The interest to service the loans exceeds the income we get from what the municipality invested.
This was revealed in the investment report that was tabled during a Full Council meeting.
Whilst section 154 is welcomed by the DA, it is self-inflicted by the ANC leadership, its alliance partners and the City Manager.
The DA is hopeful that this long overdue intervention mechanism by a team of appointed professionals will assist the Municipality in implementing turn around strategies such as:
– Addressing the collapse of Water and Sanitation
– Addressing the uncollected rates and services debt now at R32 Billion (70% owed by domestic households)
– Addressing the issue of unread water and electricity meters (tens of thousands for more than 1 year – if ever) starving the Municipality of important revenue
As the Democratic Alliance we have argued at every available opportunity that lack of accountability will ultimately impact on revenue income. We further consistently offered to be part of the solution in a turnaround strategy citing that where the DA governs, they govern well, instead we were ignored and here we are now faced with a negative credit rating.
The notion of simply borrowing Billions in loans to fund infrastructure developments, maintenance and service delivery instead of growing our rates base and collecting debt has thankfully been highlighted as a major concern.
The report now confirms that borrowings must be dramatically reduced and replaced with generated revenue. This is a win for the hard-pressed Ratepayers who end up servicing these massive loan debts.
The Democratic Alliance has been the only Political Party to vehemently oppose these Billions of Rands worth of loans and we are delighted that the Section154 team has confirmed that the DA’s position was 100% correct.
The investment report pains the DA as we could have been so much further down the road had our contributions been taken into account over the past three years. It is our continued hope that sooner rather than later we collectively turn this municipality around which has a great deal to offer.