NELSON MANDELA BAY MUNICIPALITY: CONTROVERSIAL R32.5 MILLION WRITE-OFF NEEDS FULL INVESTIGATION

3 April 2025

GOOD Statement by Lawrence Troon ,
GOOD Nelson Mandela Bay Councillor

03 April 2025

GOOD condemns the recent Nelson Mandela Bay council decision to write off 50% of Premium Precision’s debt, amounting to over R32.5 million. The decision raises serious concerns about fairness and transparency.

It is GOOD’s belief that Premium Precision has the ability to raise sufficient capital to pay off the debt and the municipality has a responsibility to explore all avenues for debt recovery before resorting to write-offs. Premium Precision owns multiple properties, some valued at over 2 million.

Although the Prescription Act 68 of 1969 states that municipal debt can be prescribed after 30 years, it is unclear if this debt is indeed that old.

The municipality has a responsibility to be transparent and accountable to its citizens. The decision to write off Premium Precision’s debt needs to be thoroughly investigated and explained. This includes:

  1. Publishing the criteria used to determine write-offs.
  2. Providing a detailed explanation of why other debt recovery options were not pursued.
  3. Making the bank statements of Premium Precision’s accounts available to council. This will help the municipality assess the financial status of the company and understand whether they had the means to pay off the debt.
  4. Request a deed search and Experian report to verify the financial status of the owner.

This situation highlights the need for a robust system of checks and balances to ensure that municipal funds are used responsibly and that all citizens are treated equally. Individual consumers, who owe far less, are left in the dark as their prepaid electricity is used to recover municipal debt.

Officials responsible for this decision, including the EFF’s Khanya Ngqisha, should be held liable for the 50% write-off if it is in contravention of Section 32 of the Municipal Finance Management Act (MFMA). This section imposes accountability on municipal officials and political office-bearers for unauthorized, irregular, or wasteful expenditure and mandates municipalities to recover such funds.

Media enquiries: media@forgood.org.za