The South African Local Government Association has declared a dispute with Treasury in a bid to force the release of about R1 billion to 39 municipalities, whose funding is being withheld because of outstanding debt to Eskom.
Salga chairperson, Thabo Manyoni, who is also the mayor of Mangaung, told Parliament’s standing committee on appropriations that last month’s decision to withhold the equitable share of 59 municipalities with outstanding water and electricity bills was short-sighted.
He said it painted all defaulting municipalities with the same brush, ignoring the fact that some could never be viable.
A Treasury official said the net effect of declaring a dispute would be an obligation on Treasury to immediately release the remainder of R2.2 billion being withheld from municipalities, because of the legal prescript that inter-governmental disputes be resolved at a political level, rather than through adversarial litigation.
It has already in recent weeks released some R1.2 billion to 20 municipalities who have entered into payment agreements with Eskom.
The cash-strapped utility is owed about R9 billion in arrears by municipalities.
