Gauteng MEC for finance, Lebogang Maile, has revealed that in spite of financial challenges facing the province, Gauteng will never go bankrupt.
On Monday, Maile confirmed that as promised last Thursday, the province has paid its first instalment of R3.8 billion towards the e-toll debt which was scrapped following a government proclamation in April that authorised the scrapping of the e-tolls in the province.
He added that the obligation to service the e-toll debt has necessitated the implementation of reforms such as cutting down on expenditure and a host of other interventions.
“Today, the Gauteng provincial government is starting the process to service the historical debt of R12.9bn in five equal annual instalments at government five-year interest rate.
“The first instalment that we are paying today amounts to R3.8bn, consisting of R3.2bn historical debt and the maintenance portion of R546 million,” he said.
Maile indicated that the province will have to find ways each year to keep up with the instalments.
“The province will need to allocate a substantial amount of funds each year for the next five years to meet the repayment obligations. As a result, we are working with revenue-collecting departments to identify alternative sources of revenue to ensure that front-line service remain uncompromised while safeguarding essential social services for vulnerable members of society,” he said.
In spite of this, Maile said the province will weather the storm and will never be bankrupt.
“The Gauteng provincial government will never be bankrupt. We are looking at various ways to enhance our revenue to particularly ensure that service delivery is not compromised.
“Secondly, we are facing challenges due to these budget cuts and because of the e-tolls. It is difficult and that is why we are looking at various way in which we can enhance our revenue, so we do not compromise service delivery. That is what is important and that is why we were able to find the money… This is a very difficult job that the team and the HOD are doing.”
Maile said under these circumstances, it was important for his department to be transparent and communicate to its citizens some of the challenges the province is going through.
“It is a very challenging job, but we deem it fit to give regular updates to residents of Gauteng on the state of finances, so they better understand the challenges and also ensure that we deliver on services,” he said.
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