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Gariep municipality debt settled

Nov 05 2012 17:58 Sapa

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Johannesburg - The Eastern Cape government and the Joe Gqabi district municipality on Monday settled a debt of R2.7m owed by the Gariep local municipality.

The municipality recently lost a court case, which led to the Eastern Cape government attaching some municipal assets.

The Joe Gqabi district municipality is made up of the Senqu, Elundini, Gariep, and Maletswai local municipalities.

"The money has since been paid through the Joe Gqabi district municipality and all municipal assets attached must be returned to the municipality," Eastern Cape local government MEC Mlibo Qoboshiyane said in a statement.

Qoboshiyane said a decision was made to pay the money in a bid to rescue the municipality from potential administrative and financial collapse.

"Together with the provincial Treasury, SA Local Government Association and the Joe Gqabi district municipality, we have decided to provide hands-on support to aid Gariep to better attend to their administrative and financial challenges," he said.

"Last year we had to pay an Eskom debt on behalf of Gariep and we are worried that this municipality always comes cap in hand, looking for emergency bailout."

Qoboshiyane said a number of factors that contributed to the administrative and financial problems were identified. Some of these predated the merger of three local towns to form the Gariep municipality.

"Gariep is one of our municipalities with low revenue base and this affects their cash flow seriously."

There were also serious administrative problems that exacerbated the financial situation in the municipality. The provincial government would attend to these.
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