Metro relooks finance plan after Moody’s downgrade

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Mangaung Metro will reassess its financial recovery plan after Moody’s resolved that so far it has not been able to improve the state of the metro’s books. The plan was put in place in 2018 to upgrade Mangaung’s financial performance but instead resulted in a downgrading report last week.

According to municipal spokesperson Qondile Khedama, there will be an evaluation of revenue collection amongst other matters in hopes of a better rating by Moody’s Corporation.

“Part of the focal areas that will need the city’s immediate attention will be to relook at the financial recovery plan and assess the weaknesses; which have brought challenges in implementation. This will include looking at our revenue collection strategy and matters related to good governance. This is to ensure that as we go to the next assessment by Moody’s, the situation would have improved significantly,” he said.

Khedama added that Executive Mayor Olly Mlamleli will hold an urgent meeting with senior officials in Managung with the intention of interrogating the details of the report and the immediate steps that would be taken.

“I view this report in a serious light and as a collective in this institution, drastic measures have to be undertaken in order for us to restore investor confidence and assure service delivery,” said Mlamleli.

Khedama explained that the downgrade of the Metro from Ba3 to B3 status has a negative effect on investor trust and the outlook of residents.

“The city acknowledges that while the credit profile of the metro is adverse and shows weakness, the situation is not dire as we are still able to attend to mandates and meet deadlines such as employee costs which consist of salaries and allowances, third party payments and SARS,” he stated.

“We are also ensuring that despite the challenges, mandatory services such as water, electricity and refuse removal are provided to residents of Mangaung and that these are services we will not compromise,” elaborated Khedama.

Nomaqhawe Mtebele

nomaqhawe@mahareng.co.za