Council writes off R100 mln

2008-12-18 00:00

Msunduzi councillors voted to write off debt of more than R100 million at a special full council meeting on Wednesday.

The write-off of irrecoverable debts amounts to just more than R293 million in two years. In August 2006, the municipality approved the write-off of R184 million in arrears and this week R109,6 million was written off.

The recent write-off was approved by all political parties, as they were of the view that it will benefit indigent communities, most of whom live in low-cost housing, and that there is no way for council to recover the debts.

The bulk of the write-offs — R45 million — were attributed to indigent service charge arrears for houses worth under R60 000. The categories included indigent debt, which amounted to more than R18 million, indigent rates arrears for houses worth under R60 000 (R15 056 235), indigent rates arrears for houses under R30 000 (just over R1 million).

Automatic indigent debt and other arrear debt totalled R25 371 121 and R1 818 203 respectively.

Msunduzi municipality speaker Alpha Shelembe (ANC) said most of the debt in low cost houses was accumulated as a result of property value increases, which meant the residents were then billed for services.

Shelembe said the municipality would not have recovered the debt.

The IFP’s Dolo Zondi said his party also supports the write-off as it will benefit the poor, but conceded that not all the poor people who qualify to have their debts written off were considered. Zondi said the municipality has to consider writing off the debts of communities within its jurisdiction that are supplied services by Eskom and Umgeni Water.

He said residents in these communities have accumulated bad debts with Eskom and Umgeni and are unable to pay these suppliers.

Mark Steele of the DA said that his party also supports the write-off after the municipality officials explained that the debt could not be recovered. Steele, however, said that his party is concerned that the large sums of money being written off might bring problems for the municipality in the long term. He said that a plan to better manage the debts is needed by the municipality.

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