PE mayor in trouble over debt collections
Faced with a R600-million debt crisis, attempts by the Port Elizabeth metro council executive mayor Nceba Faku to fast-track into operation a R20-million
contract with a company for debt recovery has landed him in hot water.
Last Thursday he came close to facing a revolt by his council for not discussing
the contract with them. On Tuesday he faced residents who marched to his office
objecting to summonses they received for arrears.
The council signed a contract with Unihold Business Solutions (UBS) for assistance with debt recovery. It then tried to reduce the contract from a five-
year to a one-year period.
Faced with a civil suit from UBS, the council has
agreed to a R1,5 million settlement with the company.
A renegotiated contract requires the metropolitan council to pay UBS more than
R9-million by May 15, R7 210 682 by July 2 and the balance of R1 802 670 over
Owing to the financial crises an urgent council meeting was held last Thursday.
When Faku told the meeting about the UBS settlement, African National Congress
councillors were unwilling to rubber-stamp the controversial deal while the Democratic Alliance described his actions as “arrogant”.
The situation is being taken seriously by the ANC western region and its alliance partners, and an urgent meeting has been called to discuss the matter
The metropolitan’s finance committee is battling to balance its 2001/2002 draft
operating budget. The R1,7-billion draft budget has a shortfall of R100-million.
The main cause is escalating arrears of more than R600-million, which increases
at a monthly average of R15-million.
Heads of municipal departments were recently asked to identify areas in which
savings could be made in order to finance other municipal projects.