The 25-year contract between Mafube Municipality in Frankfort and Rural Maintenance, a private electricity distributor, has raised concerns and is blamed for the municipality’s ongoing financial issues.
In 2012, the Free State municipality transferred its full electricity function to the private company. Despite claims of stability, there were salary delays in May and June, with the last delay in December 2023.
The municipality operates under an unfunded budget, with Advocate Mothusi Lepheana serving as the acting municipal manager.
Lepheana says, “I have been here since November 7, 2022, not as part of an intervention team but as part of the support provided by COGTA to the municipality. From that moment until now, we have had a generally stable municipality, until May 2024 when we didn’t pay salaries and started having these problems.”
“You have a situation here in this municipality where there was an illegal contract of electricity given to rural maintenance. It was not challenged initially, but we have challenged it in court now. It’s a 25-year contract that did not follow procedure, and the municipality is losing everything from electricity revenue. We’re not getting anything from electricity through that contract,” added Lepheana.
Mafube Municipality’s administrator Lungelo Mzaka says a financial bailout from the National Treasury is the only hope for the struggling municipality.
Mkaza believes it will take time to address the historic issues. The municipality owes almost R200 million in pension funds, R1.2 billion to creditors, while R950 million is owed to them.
A three-year financial recovery plan is set to be implemented soon.
Concerns about Mafube Municipality’s financial affairs
“The financial recovery plan only came into being at the end of August and was approved by the council on September 5, 2023. Given the complexities of the challenges the municipality faces, it has been extremely difficult, and it remains difficult, to turn around the place because in the absence of resources, you will never be able to turn around any organisation,” addsMkaza.
Workers have been informed through a statement that they will receive their June salaries next week.
The South African Municipal Workers Union’s Johnny Mbele says they calling for intervention at national level.
Mbele says, “Cogta under former MEC, the current MEC of Finance Toto Makume, Toto is sitting with our memorandum. It has been laying there from July last year in Free State Cogta. So there’s no door that we didn’t go and knock at to try to explain what is it that needs to be done.”
“So currently, our only solution is the intervention, national intervention,” Mbele adds.
