The Thaba Chweu Local Municipality’s proposed financial recovery plan raises serious concerns, as it is based on assumptions for which the Council has not been presented with sufficient supporting evidence.
According to the latest reports, the Municipality faces an unfunded budget deficit of approximately R1,04 billion.
The proposed solution mainly entails restructuring approximately R2,23 billion in Eskom debt and freezing interest for the duration of the intended agreement with Eskom.
Councillors, however, have not received the supporting documentation confirming that these terms have been formally accepted and signed by both parties. Without this confirmation, it is difficult to say with certainty that the financial relief, projected in the recovery plan, will materialise.
The central question is simple: Is the Municipality’s recovery plan based on confirmed facts or on expectations that have not yet been formally established?
Reclassifying debt does not resolve the underlying problem. Even if the approximately R2,23 billion in debt is reclassified as a long-term liability, the debt will still have to be repaid. The Municipality also needs to explain how it will finance future electricity purchases while servicing its existing debt.
Moreover, the actual extent of the Eskom debt is uncertain. According to the quarterly report, the Municipality owed approximately R2,344 billion for bulk electricity as at 30 September 2026. This figure does not correspond with the R2,23 billion mentioned in the restructuring proposal and requires further clarification.
Die finansiële druk op die munisipaliteit word verder beklemtoon deur die feit dat uitgawes van sowat R337,4 miljoen reeds aangegaan is teenoor ‘n kwartaallikse begroting van R252,7 miljoen.
In addition, its interest expenditure has already reached a staggering R32,1 million, while the total annual budget for interest is just R1 million.
Another cause for concern is the contradictory figures in the financing plan. The plan refers to additional income of R70 million, but the underlying calculations comprise R250 million in once-off revenue and R261 million in sustained revenue. These amounts total R511 million, so, the plan needs to be corrected and clarified.
Residents have the right to be assured that proposals involving billions of rand in debt and the future of service delivery are based on accurate figures and enforceable agreements. Transparency and accountability are essential for restoring confidence in the Municipality’s financial recovery process.
The Municipality should, therefore, disclose the relevant agreements, financial calculations, debt schedules, approvals and realistic cash-flow projections so that the Council and the public can assess whether the proposed recovery plan is viable.
The main aim should be to put forward a credible and sustainable financial recovery plan that restores the Municipality’s financial stability and assures residents that service delivery will improve.
