Sustainability of the Ekurhuleni Housing Company under threat following ANC mismanagement

by Cllr. Mabekenyane Thamahane — DA Shadow MMC for Human Settlements in Ekurhuleni

Date: 30 October 2020

Release: Immediate

Type: Media Statement

The Democratic Alliance (DA) in Ekurhuleni is concerned about the financial sustainability of the Ekurhuleni Housing Company (EHC) after a worrying performance was reported in quarterly financial results for the entity.

It is evident from the financial and non-financial performance results for the first quarter of the 2020/2021 FY that the EHC’s problems are mounting through the perennial operational and financial underperformance putting into question its sustainability.

Concerningly, the EHC’s main source of revenue is derived from rental income, which are in drastic decline as indicated from the Report. The poor rate of rental income collection is likely to be further exacerbated by the lockdown associated with the Covid-19 pandemic, which adversely affected resident’s ability to honour their rental agreements.

There also seems to be no plan from the ANC-run Metro, as there has been no short-term stabilisation strategy implemented as presented by the ANC appointed MMC for Human Settlements, Cllr. Lesiba Mpya. The Metro has also failed to implement the Audit Committee’s recommendation that a revenue optimisation plan be urgently implemented to stabilise the operational financial position of the EHC.

The rot is evident through the unjustifiable overspending of R788 989 on just two board meetings and three sub-committee meetings during the first quarter.

To add to the precarious position of the EHC, there are five vacancies reported, one of which includes the critical position of Company Secretary. It is no wonder that the entity is fast becoming dysfunctional.

The DA calls on ANC appointed Executive Mayor, Cllr. Mzwandile Masina, to take urgent and definitive steps to get the EHC back on track before it is added to the pile of failed entities, which includes the Brakpan Bus Company.

The residents of Ekurhuleni deserve their taxes to be used appropriately for service delivery, and not wasted on entities that do nothing but drain the City’s dwindling fiscus.

Cllr. Mabekenyane Thamahane

DA Shadow MMC for Human Settlements in Ekurhuleni