The decision by the Mayor of the Tshwane Metro, Nasiphi Moya, to host this year’s State of the City Address (SOCA) at Unisa with excessive glitz and glamour demonstrates a shocking disregard for the Metro’s serious financial predicament.
While the Metro is technically bankrupt, thousands are squandered on a vanity project that does nothing to improve service delivery. This needless splurge only increases the financial burden on already overtaxed ratepayers and shows that the Mayor has completely lost touch with reality.
Moya claims that since her coalition took over, the Metro is in a much better place. The opposite is true, though. Service delivery is at its worst ever. She even denies that Pretoria is experiencing a water crisis, while Hammanskraal still does not have access to clean drinking water.
The funded budget is an illusion, seeing as the report by the Auditor-General (AG) indicates a collection rate of just 83%, and not 90% as is estimated. While the Mayor cites improvement in cash reserves, she makes no mention of the outstanding creditors exceeding R5 billion – mainly Eskom and Rand Water.
The Metro recently reported an accounting surplus of approximately R2,6 billion. The public, however, needs to distinguish between this “paper profit” and actual cash flow. The cycle began with a transfer of R2,5 billion in unpaid debt, which still weighs heavily on the balance sheet.
Despite the reported surplus, the cost-coverage ratio remains critically low at only 0,1 months, meaning the Metro has sufficient liquid reserves to survive for a mere three days if collections were to stall.
In addition, by failing to pay creditors within the prescribed 30 days, the Metro is accumulating hundreds of millions in interest penalties – fruitless and wasteful expenditure that quickly cancels out any theoretical surplus.
In the view of the Freedom Front Plus (VF Plus), the Mayor’s growth target of 3,9% is a dangerous assumption without immediate and aggressive fiscal reform.
Promises of R86 billion make for nice news headlines, but do not pay Eskom bills or repair burst pipes.
A world-class economy cannot be built on a bankrupt foundation. Investors will not risk their capital in a Metro where basic service delivery is a daily gamble and the debt burden continues to grow.
Growth does not happen by chance; it the result of a municipality that serves its ratepayers, protects its industrial hubs and prioritises clean audits over political games.
The VF Plus will enquire as to the actual cost of the SOCA to determine whether it was worth the money.
Freedom Front Plus Leadership: The party is currently led by Pieter Groenewald.
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