DA welcomes new Hawks investigation into illegal VBS investments

2 March 2020

The Democratic Alliance (DA) in Gauteng welcomes the news that the Hawks in Pretoria have opened a new case in connection with the illegal VBS investment scandal.

In May 2018, the DA opened a case at the Carletonville police station regarding the illegal investment of R50 million by the Merafong Local Municipality.

However, the Hawks have informed the DA that they have closed the initial case that was opened and have now opened a new case for further investigation.

This indicates the seriousness of this matter hence a new case has been opened.

These illegal investments with VBS have had a negative impact on service delivery in this municipality as local government services have collapsed.

In recent weeks, Merafong has been plagued by service delivery protests. Certain parts of Khutsong have been without power and water for months, and Kokosi, Wedela, Blybank and Greenspark are often hard hit by outages, including those who pay their accounts.

This  illegal VBS  investment has had far reaching effects in term of the municipality’s cash flow. Currently , the Merafong  Council is paying creditors in order of priority and only when money is available.

The creditors as at December 2019 stood at R581 million of which  R395 million is for Eskom and  R62 million for Rand Water.

This indicates that this municipality is in financial distress and on the verge of financial collapse. This is further exacerbated by the fact that the revenue collection is around 60 %.

It is unacceptable for the residents of Merafong to be at the losing end of the stick because of the decision of the ANC-led government to illegally invest public funds with a Mutual Bank.

The DA will be closely monitoring the progress of the investigation to ensure that no stone is left unturned in this matter.

Issued by Ina Cilliers,DA Gauteng Spokesperson on Standing Committee on Public Accounts, 2 March 2020