R16 million for VIP toilets but Madibeng is “technically bankrupt”

The Madibeng municipality proposes to spend R16 million on VIP toilets in the Assen area in Madibeng according to the 2022/2023 draft budget. A further R65 million will be spent on these toilets in two other areas during the following two years.

VIP toilets will be installed in rural areas.

A VIP (Ventilated Improved Pit ) toilet is essentially a hole in the ground over which a ventilated structure is built.
The proposed draft capital budget seems to concentrate on rural areas, with no or little money allocated for Brits and Hartbeespoort.

The proposed budget totals R 2.8 billion, comprising of R 2.53 billion operating expenditure and R 361.9 million for capital expenditure.

According to the draft budget, the municipality is “technically bankrupt” and cannot pay its creditors within 30 days. “It has entered into payment arrangements with bulk suppliers but does not help cause the municipality keeps defaulting. It is in this regard that the Municipal Council of Madibeng recognises the impact of the past bad financial management practices that are negatively impacting the financial sustainability of the Municipality. Therefore, Council should ensure that all stakeholders assess the implementation of both financial plan and the revenue enhancement strategy on a monthly basis to ensure that future generations do not become over burdened by unsustainable financial decisions by the current generation.”

The municipality owed R960 463 to creditors at the end of February.

The municipality’s proposed financial plan wants to ensure that the plan is based on a structured and consistent methodology that will ensure long-term financial affordability and sustainability.

The municipality plans to:
• Speed up the process of registering established townships that are not yet registered.
• Install service meters in areas with services but without metering.
• Link all meters to the billing system.
• Consistent and accurate meter readings.
• Ensure implementation of credit control.
• Debt collection on existing debts.
• Coordinate taking over revenue earning infrastructure owned by other state entities (Eskom and City of Tshwane).
• Compile business cases for additional grants applications.
Part of the financial plan is to implement cost containment. The municipality will look at the following:
• Capping overtime claims to only 40 hours and ensuring that it’s only those entitled by law to work overtime
• Introduction of shift system to those employees whom the municipality deems to be working on shift.
• Reduction of consultants
• Reduction of contracted services

The following tariff increases are proposed:
Property rates for the budget year 2022/2023 will not be increased. Electricity is proposed to increase with 9.6%, and water, sewage, refuse removal, surcharges and other services with 4.8%.

The electricity tariff increase is an indicative percentage, as Madibeng is still waiting for the guideline from Nersa. The municipality must still apply to Nersa for a tariff increase.