Cash-strapped Emfuleni embarks on internal spending review

Eskom attached four of the municipality’s bank accounts due to an unpaid electricity bill of over R8 billion.

The power utility’s action to recoup the long-standing debt, accrued since 2018, has resulted in the municipality's being unable to deliver essential services to residents. 

According to Emfuleni's Finance MMC, Hassan Mako, an internal financial review discovered that the municipality had been undercharging for certain services, such as waste collection.

“We have implemented all the tariff structures suggested by the Gauteng Finance and Economic Development. However, the waste collection tariff was very low, and we are currently doing a cost of study to find a proper way to bill our residents,” Mako said. 

The municipality's financial struggles are longstanding, with previous Eskom debts amounting to R1.9 billion in 2019 and R900 million in 2018.

Emfuleni's turnaround strategy, presented to the Gauteng Department of Finance and Economic Development, focuses on two key areas: optimizing its organizational structure and reducing expenditure. 

Mako said this would hopefully enhance operational efficiency, cut costs, and ultimately achieve financial stability.

“We are spending three million a month on fuel, which is unreasonable. Hence, we are thinking of outsourcing our fleet, which will reduce our insurance premiums and cost of vehicle maintenance,” Mako told Jacaranda FM News.  

Emfuleni Local Municipality remains confident that it will reach an amicable solution with Eskom as soon as it is able to finalise a service-level agreement.

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