Gauteng municipalities financially strained due to load-shedding, putting service delivery at risk

Issued by Adriana Randall MPL – DA Gauteng Shadow MEC for Finance
30 May 2023 in Press Statements

Gauteng residents will have to contend with unfilled potholes and no removal of illegally dumped refuse due to the financial impact of load-shedding on our municipalities. This is a matter of grave concern, and provincial and national financial support is urgently needed to ensure that our municipalities can continue delivering basic services.

Municipalities are forced to move budgets from other service delivery budgets to assist with the increased expenditure relating to the repair of the electricity network, maintenance, vandalism, security and overtime.

Municipalities no longer sell electricity at a profit. This was used to ensure that there was an adequate budget to fund other service delivery projects. In addition, municipalities have to procure generators, diesel and oil. These are additional expenses that are not budgeted for in the original annual budgets.

Should there be no intervention from the provincial and national governments, the operations at municipalities will come to a grinding halt.

In a recent reply, it was confirmed that neither provincial nor national governments had a strategic plan to assist local municipalities financially. The only respite offered was that local municipalities had to reprioritise their budgets to ensure adequate funding.

In the City of Johannesburg, City Power conducted a desktop study on the cost of load-shedding and a figure of R3,6 million per day was determined, whilst the Midvaal municipality reported a 50% shortfall currently in their available budget. Rand West Local Municipality spent R53 million in January 2023 alone on repairs to damage caused by explosions at two substations due to vandalism and an electric current surge after load-shedding.

National and Provincial Treasuries urgently need to consider new models of financial support to municipalities to ensure they cope with the rapid increase in expenditure due to the impact of load-shedding, as funding over the Medium-Term Expenditure framework is not sufficient to keep the wheels turning in our municipalities.