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Lease contracts: Mbombela Municipality creates more debt while owing Eskom R1,32 billion

The FF Plus in the Mbombela Local Municipality (Mbombela/Nelspruit, Barberton, Hazyview, Kaapschehoop, Skukuza, White River) will request that the issue of intergovernmental lease contracts be handed over to the commission responsible for intergovernmental disputes and settlements.

In 2022, the FF Plus vehemently opposed the renewal of Mbombela’s lease contracts with other state entities, like the Mpumalanga provincial government and national government departments.

These agreements brought about enormous amounts in debt.

A summary sent to the FF Plus on 31 May 2022 indicated that the outstanding debt of both the provincial and national government departments amounted to R136,3 million.

And eight months later, that debt has grown to R184 million, a spike of R47,7 million. An exorbitant amount of money, R5,9 million, is owed to Mbombela every month.

According to the 2022 summary, the following departments owe the most:

Provincial departments:
· Education
· Public Works and Transport
· Health

National departments:
· Public Works
· Rural Development and Land Reform

At the time, the FF Plus requested that the amounts owing must first be paid before new contracts are entered into. The ANC caucus, however, opposed the request.

In the FF Plus’s view, those payments would have helped the cash-strapped Municipality get by or even repay its debt to Eskom.

At present, its Eskom debt amounts to approximately R1,32 billion.

If the Municipality had heeded the FF Plus’s advice to first collect its debt before signing new intergovernmental lease contracts, it would not have found itself in such a dire financial crisis.

Read the original article in Afrikaans by KP Robertson on FF Plus

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