Metro writes off R2.7bn in arrears

2012-10-07 22:07

Johannesburg - The Ekurhuleni Metropolitan Municipality has resolved to write off R2.7bn on the debtor's book, the metro said on Sunday.

The reason for the decision was twofold - the municipality had reached its target in the collection rate and other debts were now uncollectable, spokesperson Sam Modiba said.

"This comes as the municipality experiences an increase in the collection rate, recorded at 93% for the 2011/2012 financial year," Modiba said.

Based on the financial results of 30 June 2012, council approved that R2.7bn be written off for residential account holders only.

"This represents uncollectable debt older than three years in respect of services, excluding assessment rates."

As per approved credit control and debt collection policy, credit control actions had been applied, including pre-paid electricity blocking.

The municipality was experiencing collection challenges particularly in areas supplied by Eskom. A large portion of accumulated debt standing at 36.93% lay in the Eskom supply area, said Modiba.

"The challenges are even more evident with regards to debt older than three years, where Eskom supply areas represent 46.7% of arrears," he said.

He said these conditions were negatively affecting financial results, and the decision was taken with the municipality knowing it would create a negative perception on the part of rating agencies, and thus an impact on the costs of capital required for infrastructure developments.

The municipality had exhausted all avenues to collect debts, hence the decision to write them off.

"We do emphasise that this debt is uncollectable and cannot be collected legally as all available collections avenues have been exhausted," Modiba said.

Affected account holders would be credited with write-off value by the end of November.

  • billy.bunter.779 - 2012-10-07 22:36

    Having paid your account on time for 23 years, try missing one month and their goons are out in a flash to disconnect your lights and water - yet they can write off R2,7bn. Is there an election in the air?

      sheik.mohammad.378 - 2012-10-08 00:46

      They should have left the municipalities as they were because we now know they can't run anything larger than a bath. Even then I have my doubts.

      mc.segal.5 - 2012-10-08 05:27

      You Need water to run a bath Sheik.

      fredster.mania.5 - 2012-10-08 07:03

      ...and I bet you that the loyal paid up customer is going to fit the bill at the end...sickening

  • sally.lewitt - 2012-10-07 22:46

    This is an 'INSANE' amount of money... How many homes, clinics and schools can be built with this amount..??

  • FinalJustice - 2012-10-07 22:58

    So here's a clear example of good governance: Reaching their targets on collectible income by means of increased rates, and nullify the outstanding 3 years' debtors in the process. Implicating that the R2.7BIL could have been saved in tariff hikes IF there were an efficient means of collecting bills in arrears. Meaning that those who DO pay, not only to support those who do NOT, they also COMPENSATE for the utter incompetence of those (who are supposed to be) in charge ... The logic makes perfect sense!

  • - 2012-10-07 23:35

    So it pays in the end not to pay in the beginning?

  • trevor.bush.9655 - 2012-10-07 23:39

    ANC has just bought some more votes, VIVA ANC theaving corrupt bunch of racists!

  • stanton.clarke - 2012-10-08 00:01

    Would like to see the amount broken up by ethnic group : White, Black,Coloured, Indian, Other

      anakin.skyvader.9 - 2012-10-08 12:17

      Brilliant!! Now...we DEMAND that it be done by race classification, exactly the same way as when one applies for a job and have to tick the AA EE OTHER boxes (that's already racist by design). We know we are subsidizing the 'free users': it's very clever: on your bill they break it down by steps: the more kl/kW you use the more you pay for each unit of consumption. Ie they go from STEP1 to STEP4 and charge different rates on each STEP. That way they generate 'free money' to cover the others users that don't pay.

  • tomas.evan.5 - 2012-10-08 02:40

    Why is it that the municipality will cut off your electricity for one month errors but then rights off Billions of uncollected debt. It seems they are targeting select groups that are seen as "easy pickings". Why is it that the paying community is punished for the non payers. If everybody paid then the rates would be lower and more money could be used to improve services. Maybe the Mayor's salary should also be reduced to help offset the burden that has been placed on the people that do pay.

  • nicolas.gombert.16 - 2012-10-08 05:27

    The Ekurhuleni Metro is corrupt and incapable. The Robert McBride fiasco has not been forgotten. The infrastructure is falling apart and there is no application of the by-laws, so everybody just does what they like. The officials are taking bribes left, right and centre. You cannot even visit the service centre in CR Swart Rd without paying a bribe to do even the simplest thing. Pathetic!

      denis.dendrinos - 2012-10-08 10:57

      and ever notice how your rates and water and elec and far higher than it should be? Simply put they over charge you so that they can cover this loss. Add a few hundred to every one's bills cos after all - it makes sense that those that earn a salary should support the far higher number that don't. And what do we do with the money? Build the country and the economy? Oh please - don;t be silly, we piss it up against the wall with parties and blue label. Take it you're from Kempton nicolas........

  • richard.lemmer1 - 2012-10-08 05:48

    Who will pay for this in the end ??? Us !!!!!!!

  • Tshepo Gwamanda - 2012-10-08 06:11

    Ekurhuleni Metro has a 93% collection rate, wow I find it very hard to believe!! Please elaborate on this further. This is made up of speeding fine tickets and prepaid electricity metres not collection of rates on residential properties. People in the townships don't pay that!

  • Shaun McDermott - 2012-10-08 06:18

    i am so surprised by this here in the UK if you owe money for council tax or even to the Electricity company you will be pursued by private companies for the rest of your days untill you finally pay up and they have funny ways of finding you and extracting it from you and they never leave you alone.

      Willie Olivier - 2012-10-08 07:20

      what surprises me is that I pay all my bills every month, but if I want to apply for a home loan, the banks tell me I,m only qualify for a 90% loan because I am a white self-employed male

  • brionyl.french - 2012-10-08 06:29

    how does one write off such large amounts of money, surely it catches up with you?

  • J.Stephen.Whiteley - 2012-10-08 06:49

    The write-offs are certainly in Katlehong and townships east. When a township house was sold in Ekuhuleni; (a rare event) buyer and seller usually split the amount required for rates clearance. On inheritance, the transferring attornet could never persuade the heirs to pay, and the title remained in the name of oupa. Of course the roads and services were and are lousy; hundreds of drop toilets.

  • thomas.more.946179 - 2012-10-08 07:08

    What a bunch of incompetent idiots. I owned a house in Ekhuruleni. When I sold it I had to pay six months of rates and taxes in advance to get the deeds through. It took me another six months with a lot of effort to get my money back. They closed the account and refunded me, them all of a sudden, a few months later I got an account again. No wonder they need to write of 2.7 billion.

  • vivian.harris.73 - 2012-10-08 07:10

    Let me be in arrears for a month or 2 then I get a court summons to pay that debt.....because I'm not black. Who the racists now?

  • beverly.young3 - 2012-10-08 07:40

    Didn't Mandela do similar when he came into power? Something about writing off all outstanding municipal debts and starting afresh? I seem to recall how shocked I was at the time. Just saying, examples were set ne? On the other hand, 'other' than switching off etc., the cost of recovery, via lawyers, is mindboggling....

  • J.Stephen.Whiteley - 2012-10-08 07:53

    Ekurhuleni apart, municipal incompetence is the product of the electoral system. Municipal Councillors should all be elected on a Ward basis. The system of half constitutency election and half list system should apply instead to Parliamentary elections.

  • richard.zanner - 2012-10-08 08:21

    Off course they can write it off after all they have reached their target collections. So again we fund the consumption of others who do not pay. Amazing how they can write off funds like this and then come again with arguments that they do not enough funds so they adjust rates again and all other bills. We the paying idiots end up carrying the lot. If a business had to operate like this it will be out of business hence the argument by British Air against the huge funding to SAA again as private businesses simply cannot compete with this but private businesses create the money that they waste.

  • - 2012-10-08 08:59

    Definitely a sign that there's an election coming up.

  • sihlangu.hokweni - 2012-10-08 09:13

    Illegal Connections

  • arthur.salvado - 2012-10-08 09:20

    Someone is going to pay for the write offs unfortunately it's those who regularly pay. Sad indeed !

  • anakin.skyvader.9 - 2012-10-08 10:17

    This is how the minority ends up supporting the majority, whether we like it or not. What they are saying is that's it's way too dangerous to go into certain areas to disconnect the electricity there because their vehicles and equipment will suffer damage, not to mention the risk of their employees being attacked and murdered whilst disconnecting someone (the mob rules). Way easier to pick an accessable safe point in a white neighbourhood and disconnect the citizen there because he/she are a few days behind. So the good citizens in their minority pay for a product whilst the majority just demands, abuses, burn and steal everything? Welcome to The Planet of the Apes then.

  • Eterni80 - 2012-10-08 11:29

    what a joke. the burden on the tax paying minority grows, whilst others just shrug and demand more free $hit.

  • paulo.teixeira.39948 - 2012-10-08 11:51

    hard to stomac that 2.7 can just be written off on whim, but it is what it..........

  • rurapenthe - 2012-10-08 12:41

    Pay us! or... just dont and we'll write it off anyway.

  • anakin.skyvader.9 - 2012-10-08 12:42

    Here's a question for ESKOM on electricty consumtion: Since electricity becomes more and more expensive per unit used for domestic customers does the same principle apply for the big users of electricty - namely those aliminium smelters and export customers (friendly Zim & kie next door). Do they pay on a sliding scale - like we do or do they just get it for next to nothing - City Power for eg. now charges from R0.93/kWh [STEP1] upwards. Come on, exactly how much do these users pay? R0.30/kWh or less?

  • sarel.brits - 2012-10-08 13:51

    We should stop paying until those debts have been collected the paying people don’t get a pay holiday but the thieves get everything for free… sounds familiar much the same as in Parliament. I wonder how long it will take for the white people in this country to realise that the ANC is using our own money to subjugate and turn us into 2nd class BEE citizens in our own country by buying the masses votes. And when I say white people I acknowledge the moderate hardworking black people that also pay and pay and pay with us for pretty little in return.

  • zaaristotle - 2012-10-08 14:19

    "The reason for the decision was twofold - the municipality had reached its target in the collection rate..." - So just because most residents abided by the law and paid for what they used, this means the rest don't have to pay. As a resident of Ekurhuleni, what exactly do I get for diligently paying my bill each month - potholed roads and pavements, filthy parks, streetlights out of order, blocked drains...

  • antonio.pisapia2 - 2012-10-08 15:14

    it only belongs to taxis and taxis . don't forget they are exempt for toll gates

  • Don.Tandy - 2012-10-08 15:16

    "would create a negative perception on the part of rating agencies" - you f**king morons, think of the negative perception you have just created with your (now ex) paying customers.

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