A report on eThekwini Municipality’s financial performance has revealed that 8 114 “households” have applied for the debt relief programme, and the City has called for more to apply before the programme ends at the end of the month.
City officials said the number of applications was small, noting that the scale of consumer debt and the number of people having their services disconnected for being in arrears showed that more ratepayers needed assistance.
Mayor Mxolisi Kaunda gave the update during the last council meeting of the year on Monday, revealing that the value of these applications amounted to more than R780 million.
The programme was reinstated a few weeks ago. It has been implemented at least two times before to ease the burden faced by indebted consumers.
It benefits residential and business customers and also includes non-profit organisations. It excludes government institutions and parastatals.
To qualify for the programme, a customers’ debt must be 90 days or older and there are benefits for those who consistently honour it or pay their debt quicker as they could see the interest on the debt being partially written off.
Customers have up to 36 months to settle all outstanding debt.
The Mercury reported a few weeks ago that the City was concerned that not enough people were taking up the programme.
The municipality is owed more than R25 billion and the bulk of this is owed by residents and businesses.
Giving an update on the state of the City’s finances, Kaunda touched on the programme.
“As a caring City, in October this year, the council also approved a debt relief programme, and to date, we have received 8114 applications valued at R712m in capital debt and R74m in interest debt.
We are confident that as the programme comes to an end this month, more customers whose accounts are in arrears for a period of 90 days will take advantage of this opportunity,” he said.
Kaunda revealed that the municipality had also adopted aggressive collection tactics to collect revenue for services rendered.
“As part of improving our rate collection, we are also implementing credit control measures which include disconnection of services. Recently, we have established a disconnection committee which meets every Monday to deal with targeted disconnections.
“In the past five months, the municipality has affected disconnections to 90 731 customers with a book value of R7.97bn for both water and electricity.
With the meter reading function having re-started last month, the number of disconnections will pick up again and more orders will be issued.”
The mayor said through these credit control initiatives in the past five months, the City has achieved a higher than budgeted collection of R17.3bn against a budget of R16.6bn.
“While we are implementing these essential measures, we are fully conscious of the challenges some residents face as they struggle to make ends meet.”
Elaborating on the programme, mayoral spokesperson Mluleki Mntungwa called for more people to come forward.
“The mayor feels that a lot more people could benefit from the programme.
They should take advantage of the benefits. If one looks at the number of people that have been disconnected, it tells you that the number of people that have come forward is very little, even bearing in mind that those who have been disconnected are in arrears for around two months, whereas those taking part in the programme owe for 90 days or more.
“Residents should remember that by being part of the programme they could have a portion of their debt forgiven and the interest forgiven,” Mntungwa added.
ActionSA councillor Alan Beesley said the debt relief programme was a much-needed and welcomed initiative.
“The number of applications received does highlight how financially hard-pressed the residents and businesses of eThekwini have become. The causes of these financial pressures include municipal tariff increases that have been way above inflation and a stagnating economy. As ActionSA, we encourage all those who have fallen in arrears to take advantage of the debt relief,” he said.
DA councillor Thabani Mthethwa said 8 000 was a very small number when looking at what the municipality is owed.
“At the same time, the municipality should take responsibility for pushing many people into debt. The failure to read meters is a serious problem and as long as that continues to be the case, people will be in debt.”
The Mercury