Swoop on debtors

2010-02-11 00:00

THE Msunduzi Municipality has launched a massive crackdown to recover more than R585 million owed by government, private households and business in the city.

By January, R90 million of this amount was owed by government departments, with R495 million owed by businesses and residents.

Starting in mid-January, a task team made up of a Municipal Finance Management Act adviser from National Treasury and members of the municpal finance division started an exercise to disconnect the top 10 government debt defaulters and the top 30 private properties.

There was uproar in Langalibalele Street on Monday when the team arrived to disconnect water and electricity at Shepstone House, an eight-storey building in the city centre. Property owner Surendra Singh allegedly owes the municipality a whopping R1,2 million in overdue rates, electricity and water charges.

According to onlookers, municipal staff who went to disconnect the building’s power and water supply were shocked to discover several illegal electricity connections in the meter room. On Monday night armed guards were allegedly posted there to prevent further illegal connections.

Other defaulters targe­ted on Monday included a service station in the city centre. The owners immediately settled their debt, believed to be over R200 000, and avoided disconnection.

Disconnections were carried out on a property in Perth Street on which R570 000 is owed. The pro­perty is registered to a trust and The Witness could not ascertain the name of the owner for comment on his outstanding debt.

City chief financial officer Roy Bridgmohan was asked how ratepayers were allowed to accumulate such massive debt.

He said indications pointed to possible insider collusion and co­ver-ups, which are being investiga­ted. He said most debtors have been handed over to the two consortiums contracted by the municipality to collect the outstanding debt.

However, the collection rate is a mere 50%. He said Shepstone House has been on the books of one of the consortiums.

A director of Shepstone House, Surendra Singh, says he is not taking the matter lying down. “I am preparing an interdict to be served on the municipality,” he said.

He alleged that members of the task team were racially abusive to one of his workers, who has since laid criminal charges.

In reply to allegations of tampering, Singh said there are no illegal connections.

“All of this is a figment of their imagination. The municipality has independent contractors who go down to the meter room at random and pull out all sorts of wires. I’m not responsible for their actions,” he said

“They disconnected my bulk meter in 2007 and continue to bill me R30 000 to R40 000 a month without this meter. I stopped paying. I cannot pay on a meter I don’t have,” he said.

Singh also questioned his electricity and water readings. He concedes that his rates are R184 000 in arrears, which he is prepared to pay.

However, he said he is not prepared to hand over money to the debt collection company, which will add its own costs, and wants to pay the amount directly to the municipality.

Singh said he has asked for a bill for his rates, but the municipality will not give it to him. “They want the whole R1,2 million. I’ve been put in a corner here,” he said.

Singh said he has a dossier of information alleging fraudulent activities by certain people in the municipality. He said he is willing to hand this information to the municipality, but only to someone who can be trusted.

The task team, which has encountered all levels of resistance, remains undaunted.

Starting on Monday it is set to go on a massive disconnection drive.

The team has warned defaulters the onus is on them to settle queries, verify identification details and account numbers, report faulty meters and pay all arrears to avoid the inconvenience and additional costs of getting disconnected.

Lance Stratford, acting process manager for income, said that when they come across tampering, the meter is removed, which costs R2 000 to replace, and an extensive part of the cable to the building is taken out. This can cost the building owner up to R4 000 to replace.

MSUNDUZI, like other municipalities, has been battling with its debt problem for some time. In October, it was summoned to appear before the province’s standing committee on public accounts (Scopa) and the National Treasury, after which National Treasury sent a Municipal Finance Management Act adviser to the municipality to assist in revenue collection and debt management.

According to reports, since the start of the crackdown most government departments have coughed up. There have been problems with schools and other education institutions, such as the Durban University of Technology’s Indumiso campus, which had its water restored after applying for a court interdict against the municipality.

However, The Witness understands that the outstanding debt is still being pursued and that municipal manager Rob Haswell is soon to meet Education MEC Senzo Mchunu, Finance MEC Ina Cronje and other MECs whose departments may be affected.

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