The Mangaung Metropolitan Municipality is yet to comment on the matter of the downgrade by the ratings agency.

While the MEC of Treasury in the Free State, Gadija Brown, applauds the Mangaung Metropolitan Municipality on improving on their compliance, she adds that she is worried about the metro’s debtors list, which currently stands at R6 billion.

Brown says even with all the mechanisms in place to ensure proper debt collection, unless the metro improves its service delivery, residents and businesses owing the municipality will continue to withhold their bills owing to their dissatisfaction with how the metro is providing services. She also adds that while the metro still has to deal with issues such as waste collection, water supply and a disgruntled workforce, the metro is doing much better financially this year than it did last year and reforms are in place.

In July last year, the metro had announced that it would embark on a financial recovery plan to turnaround its financial woes and part of this plan was a revised revenue collection plan, as well as strengthening the governance and control structures, among other measures.

Despite Brown’s assertions that the metro is doing better financially, ratings agency Moody’s Investors Service on Tuesday downgraded the metro’s long term global scale issuer rating by three notches, citing the metro’s declining liquidity as the reason for the poor rating.

Moody’s also stated that part of the reason for the rating was owing to the municipality’s failure to pay its commercial bank debt on time, thus “implying a relatively high probability of default in future.” The ratings agency also said that the metro’s liquidity pressures reflect weak local governance, which in effect means that the recovery plan has also failed. This blow comes after the metro last month experienced shortages in the water supply to Bloemfontein and other towns in the metro owing to an alleged failure by the metro to pay its water bill with Bloem Water timeously.

Adding to the Metro’s woes are growing calls from the Democratic Alliance in the region, who have said Executive Mayor Olly Mlamleli must step down, while the ANC in the region last week reported that they also expressed their dissatisfaction with Mlamleli’s leadership to the party’s Provincial Executive Committee.

The Mangaung Metropolitan Municipality is yet to comment on the matter of the downgrade by the ratings agency.

OFM News

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The Mangaung Metropolitan Municipality is yet to comment on the matter of the downgrade by the ratings agency. While the MEC of Treasury in the Free State, Gadija Brown, applauds the Mangaung Metropolitan Municipality on improving on their compliance, she adds that she is worried about the metro’s debtors list,...