City debtors default

2020-01-30 15:05
City Hallâ??s Clock tower keeps ticking. The Msunduzi municipality has managed to keep ahead of the problem the pigeons keep dropping. Photo. Jonathan Burton8BIM

City Hallâ??s Clock tower keeps ticking. The Msunduzi municipality has managed to keep ahead of the problem the pigeons keep dropping. Photo. Jonathan Burton8BIM (file)

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At least 4 000 of the City’s customers who signed agreements to make monthly payments to repay their debts have defaulted several times.

The acting Msunduzi municipal manager, Nelisiwe Ngcobo, told council on Wednesday this was one of the reasons the municipality recently brought in external debt collectors to go after the consumers whose accounts were in arrears. She was responding to questions about what the City was doing to collect the R4 billion owed to it for rates and services.

The initial batch handed over for collection consisted of 67 000 accounts, with a total debt of R1,8 billion, that were more than four months in arrears.

However, Northdale’s Rooksana Ahmed said some of the debtors that were handed over had not defaulted on their payments and others were made to sign new payment agreements when they had not defaulted on the ones they previously had with Msunduzi. She asked why some of the debt collectors were not from Pietermaritzburg or even KZN.

Ngcobo said the debt collection panel was appointed through a tender process so the municipality could not just pick people from Msunduzi, but some were from Pietermaritzburg.

She said having a balance was advantageous because the City did not want people who would be manipulated by consumers into taking bribes and neglecting their duties.

“We have people who we send out to disconnect but they are convinced by some consumers who offer to pay them R1 000 or R1 500 not to disconnect. We don’t want people who will do that because we are serious about collecting this R4 billion.”

Ngcobo said the consumers whose accounts were handed over to the debt collectors had to sign new payment agreements which would result in legal action if they defaulted. “We [as the municipality] have signed several agreements with most of them but there are about 4 000 consumers who have been defaulting over and over again.”

Ngcobo said the City was not being harsh to its customers and had taken all the necessary steps to help them settle their debts even though, according to the debtors and creditors control policy, the municipality should not be entertaining any payment agreements with defaulters. It is understood that the defaulters include businesses and even landlords. Ngcobo said the City’s administration had a responsibility to collect the outstanding money and the auditor-general had also lectured the management about it.

ACDP councillor Rienus Niemand said the municipality needed to strengthen its strategies of dealing with illegal connections and tampering with water and electricity meters. He said this would help the revenue enhancement plan, which is hoped to get Msunduzi to reclaim financial stability.

Read more on:    pietermaritzburg  |  msunduzi municipality

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