Cities rack up consumer debt

2014-09-07 15:00

Municipalities across the country have R94?billion in consumer debt on their books, and the parliamentary portfolio committee on cooperative governance and traditional affairs wants to know how this debt will be recovered.

But after a session of bad news from the Auditor-General on Tuesday, the department of cooperative governance and traditional affairs did not have time to present a recovery plan to the committee.

Vusi Msibi, an executive at the office of the Auditor-General, told the committee that, of the 319 municipalities and municipal entities audited, only 30 had achieved clean audits.

His presentation should have been followed by an explanation from the department on its debt recovery plan following Treasury’s local government revenue and expenditure report last week.

This report showed aggregate ­municipal consumer debt hit R94?billion by the end of June this year.

Metropolitan municipalities, including Joburg, Ekurhuleni, Cape Town and Tshwane, were owed a total of R52.9?billion, while secondary cities such as Polokwane and Stellenbosch were owed R17.1?billion.

This was for property rates and charges for the provision of electricity, water, sanitation and refuse collection services.

Muthotho Sigidi, deputy ­director- general at the department of cooperative governance and traditional affairs, told City Press the department would present a debt recovery plan to the portfolio committee on Tuesday.

As consumers either struggle or refuse to pay municipalities, ­the ­municipalities are applying stricter ­criteria to determine who qualifies for free basic services.

Data from Stats SA this week showed that although municipalities across the country ­marginally increased the provision of water, sewerage and sanitation services, electricity and solid waste management services declined.

The hardest hit municipalities were based in Mpumalanga (where the ­provision of free basic solid waste ­management services declined 34%), ­Northern Cape (electricity declined 29%, ­solid waste 11%), Limpopo ­(electricity 28%), Free State (electricity 18%) and KwaZulu-Natal (electricity 15%, solid waste 12%).

Stats SA chief economist Hellen ­Maribe said municipalities had changed their targeting methods from a broad-based one to others – including geography, consumption and technology – to determine which households were poor.

Andile Sokomani, a researcher for the portfolio committee, said: “If ­municipalities are not paid for the services they render, then service ­delivery cannot be sustained.

“Without the provision of adequate water, sanitation, electricity and other basic services, the promise and objective of democratic government, namely to uplift the majority of South ­Africans out of poverty and deprivation, cannot be realised,” he said.

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