The Brits Sheriff was ordered to seize Madibeng Municipality’s assets, including its bank account following the municipality’s failure to pay a R325 million debt to the Public Investment Corporation (PIC).
The municipality has not made any payments towards the loan since the ruling by the Constitutional Court in 2021, ordering Madibeng to pay up. The initial debt of R162 639 962 has now doubled to R325 279 924 due to interest over the past 13 years.
The Madibeng municipality inherited the debt from the former Brits municipality. The loans were acquired prior to 1994.
After the Sheriff contacted the municipality last week with the intention of attaching municipal property to recoup the debt, Madibeng met with the PIC and it was resolved that a payment plan must be submitted before the end of October. A report by the acting municipal manager with the proposed payment plan was presented to council and the payment plan was approved.
According to the payment plan, Madibeng will repay the loan over three years, starting with a R23 million payment in December this year.
The payments, scheduled twice a year for the next three years, vary from R23 million to R79 million.
Failure to honour the settlement agreement will lead to the PIC seizing Madibeng’s assets.
The report states that the municipality now has to make provision in its 2023/2024 budget, as well as the annual budgets for the next two years in order to avoid unauthorised expenditure.