Mashatile: Struggling municipalities can’t expect debt write-offs to be the norm

Deputy President Paul Mashatile said struggling municipalities cannot expect debt write-offs to become the norm.

He said municipalities that fail to comply with Treasury conditions to manage their finances will not be eligible for the bailout.

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Municipalities owe Eskom and water boards billions of rands in unpaid debt.

Answering questions in the National Council of Provinces (NCOP) on Tuesday, Mashatile did not rule out merging non-viable municipalities that can’t survive.

Mashatile said municipalities can’ rely on grant funding meant for infrastructure development to plug the gap owing to a lack of revenue.

Treasury is withholding equitable share transfers to municipalities with large debts to bulk service providers and redirecting the money to pay suppliers instead.

“We are not going to keep debt relief forever. Eskom and water boards can’t afford that. They need those resources to be able to expand services.”

Mashatile, however, said the lack of a revenue base in some municipalities can’t be ignored.

“In the long run, we may even merge municipalities to ensure viability.”

He said the African National Congress is switching up its political leadership in failing municipalities, where it’s attempting to identify the cause of service delivery collapse.