Treasury doesn’t mince words on Lekwa’s Standerton business – Ridge Times

A financial recovery plan for the municipality of Lekwa has been prepared, published and if not set in stone, without a doubt, mandatory.

Adjectives used in the National Treasury report include experienced, skilled, and capable incumbents for critical positions, as well as nouns such as crisis, collapse, failures, political will, and identifying the board as dysfunctional.

“Almost all expenses increased drastically from 2018/2019 to 2019/2020 by 161% due to increased staff costs, advisor compensation, wholesale purchases, the allowance for bad debt and overheads “, we can read.

The Treasury decided on a three-phase plan, starting with a recovery, followed by stabilization and a move towards sustainability.

The report is not beating around the bush on Eskom’s debt, a figure of Rand 1.3 billion as of November last year, nor on the municipality’s inability to pay creditors within 30 days.

It has been recognized in black and white that the infrastructure does not meet current demand.

The lack of intervention by the provincial government was also mentioned.

The legal case of Astral Operations Limited and others in May 2018, under the Constitution of South Africa, called for national intervention and redress was granted.

The national intervention was approved on May 3, and Article 139 (7) of the Constitution and the Law on Municipal Financial Management came into play.

The Cabinet dissolved the city council on May 12 and an administrator, Mr. Johann Mettler, was appointed on May 28.

The stimulus plan came into effect on July 1.

According to the report, the pillars of municipal sustainability are governance, human resources, financial management and service delivery.

Mr Mettler has met with stakeholders, according to the report, such as community groups, large corporations, organized businesses, the Lekwa Ratepayers Association, the LED Forum, farm groups, public entities, developers and the media.

The report went on to say that internal failings within the administration have been corrected and that mismanagement, fraud and corruption are cited.

“The staff are politicized and the management team is relatively young, inexperienced, with many facing the prospect of disciplinary action and possible criminal prosecution. “

Expenditure and budget parameters such as payroll budget control are mentioned.

Lekwa must report monthly to the Minister of Finance on the implementation of the plan and the administrator must also be a signatory of the main bank account.

The commitment to strict spending controls has been called by the name.

Risks associated with the plan have been identified and include lack of political will and administrative commitment and support, inadequate internal capacity for implementation, insufficient communication, and unresolved labor disputes and litigation.

Standerton’s economic growth rate over the period 1996 to 2018 was only 0.5%, the unemployment rate deteriorated from 22.6% in 2016 to 27.1% in 2019 and losses of jobs estimated in 2020 due to Covid-19, are between 3,800 and 5,100.

Five factors of service delivery are mentioned, namely inadequate roads, lack of reliable water supply, inadequate employment opportunities, inadequate housing and lack of reliable electricity supply.


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