Martedì, 09 Febbraio 2016 20:11 | Kannaland Municipality needs R12.7m to avoid Eskom cutoff

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Cape Town - The Kannaland Municipality is urgentlylooking for R12.7m to avoid getting cut off by Eskom later in February.

If it does not get the money, residents and businesses inthe towns

of Ladismith, Calitzdorp, Van Wyksdorp and Zoar, in the WesternCape's fruit belt, will we powerless from 26 February, the provinciallegislature was told on Wednesday.

Ladismith is home to one of the country's better knowncheese producers and Calitzdorp is famous for its port grapes.

Besides not having lights, any support systems that relyon electricity will be down - from communications, to water and sewerage systempumps.

Municipal manager Morne Hoogbaard told the Western Capelegislature that the area is a seasonal agricultural belt with unemploymentsignificantly higher than the national average.

It also has a very high number of indigent people -people too poor to pay for services.

“This impedes revenue collection,” Hoogbaard explained.

In Zoar in particular, the municipality is making a hugeloss. To complicate matters, because Eskom supplies the electricity, it cannotdo credit controls and cut people off when they do not pay.

The municipality is managing to pay its current accountto Eskom.

However, the monthly payments of around R500 000 to payoff the R12.7m debt are crippling it.

The municipality has proposed to Eskom that it pay R8m ofits R12.7m arrears in full and final settlement of what it owes.

If approved, it will draw on a R7.3m loan it secured fromStandard Bank by putting up municipal assets as collateral. It will pay thisback over 84 months.

But the proposal has hit a snag. Treasury does not allowborrowing to cover debt. It will only approve borrowing for capital expenditureand infrastructure.

Mayor Jeffrey Donson told the provincial select committeeon local government that the municipality is so short-staffed that most peopleare doing the jobs of at least three others. It does not have the money to hiremore people.

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