Covid-19 cost Gauteng municipalities R4bn in just two months

Gauteng municipalities have lost R4bn in just two months because of the Covid-19 pandemic and countrywide lockdown.

The hardest-hit municipalities are the three metros of Tshwane, Johannesburg and Ekurhuleni, which lost a combined R3.5bn in uncollected revenue.

This is according to Gauteng local government MEC Lebogang Maile.

The big losses have resulted in fears that municipalities will default on their payments, with some already failing to pay Eskom and water utility Rand Water.

Maile made the remarks in his update on the steps taken by his department to address the losses caused by Covid-19.

“Tshwane lost approximately R1.2bn in revenue not collected, Johannesburg R1.5bn and Ekurhuleni roughly R800m.

“Over and above these revenue losses, municipalities have had to provide emergency services to supply additional water to communities during this period, more toilets and greater frequency in refuse collection, sanitisation and decontamination, sites for quarantine, shelter for those in need as well as food for indigent people,” said Maile.

Municipalities make money by collecting from businesses and residents, and with the closure of the economy forced by the lockdown since March, collections have been hit hard.

Maile said the loss of revenue had resulted in municipalities defaulting on payments.

He said he has since met with all Gauteng mayors to find a solution and they have resolved to meet the entities owed, including Eskom and Rand Water, to find a way to resolve the payment issues.

Maile said they also want a reprieve from the departments of energy, and water and sanitation.

“Eskom and Rand Water must be engaged to see if payment terms cannot be changed from 30 days to 45 days, as well as on whether they can relax terms when it comes to charging interest on municipal debt,” said Maile.

He said his meeting with mayors also resolved that the R20bn relief fund to municipalities, which was announced by President Cyril Ramaphosa, should be ring fenced and municipalities be barred from using it for non service delivery related expenditure.

“We remain committed to a programme of fiscal sustainability and viability for all our municipalities, with the ultimate aim of improving delivery of basic services to communities,” he said.