DA-led coalition discovers almost 19% of City’s R55-billion budget was lost to corruption

The City of Johannesburg’s Finance MMC, Dr Rabelani Dagada, has hit back at the ANC after the party said the municipality was on the brink of a collapse.

“The comments are nothing more than the ANC’s attempt at reviving councillor Parks Tau’s political career from the ashes,” Dagada said shortly after the ANC’s media briefing.

Dagada said the DA-led coalition discovered that almost 19 per cent of the City’s R55 billion budget had, over years, been lost to corruption.

He added that the City’s finances were in good standing. The municipality collected in excess of R3 billion in March and June. This is a first for the City.

Addressing the ANC’s question about the unaccounted for additional R1 billion in the new budget, Dagada said the National Treasury assessed the additional amount and believes it will probably come from customers who previously did not pay their bills.

Despite saying the City’s liquidity has been deteriorating year on year due to the billing crisis, Dagada said salaries, creditors and short term obligations are still being paid.

“Council has approved [borrowing] R3 billion to manage potential cash flow mismatches that might arise in the future,” he said. “Our cost coverage ratio is also projected to be a healthy 36 days, well above the national treasury benchmark.”

Dagada added that the billing crisis was never reduced but ‘swept under the carpet’ during the previous administration. In the next three years, the City will move away from the ‘pay-as-you-go’ model – where capital expenditure is funded by the revenue generated during the same fiscal year – to a pre-paid model where the expenditure is funded by available cash.

“The pay-as-you-go model creates a liquidity squeeze since the cash is not readily available.”

Dagada added that the ANC’s comments characterised their time in government. “Should the ANC continue on their present path, they will not only expose themselves as a failed government but a failed opposition party as well.”


Related articles:

ANC calls for Mashaba to step down

Open days possible solution to billing crisis

City of Johannesburg billing crisis is bigger than thought

Chantelle Fourie

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DA-led coalition discovers almost 19 per cent of the City’s R55-billion budget had been lost due to corruption

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