City sweats to pay Eskom

2019-10-23 15:18

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Pay your debt or risk not getting service delivery.

This was a warning from the acting chief financial officer, Dudu Ndlovu-Gambu, when she spoke to The Witness about the challenges faced by Msunduzi when it comes to collecting revenue.

Non-payment by some electricity users had caused the municipality to scramble to pay Eskom in September this year. The “winter tariffs” Eskom charged between July and September amounted to about R100 million more on top of the average R160 million Msunduzi pays the power utility on a monthly basis, said Ndlovu-Gambu.

She said when Msunduzi residents failed to pay for rates and utilities they compromised the City’s fiscal stability and risked the provision of services that led to the municipality being unable to meet all its financial commitments on time. She said in September the City had to find the money elsewhere because it could not charge its consumers extra just because it was the winter season, yet Eskom charged a winter tariff amouting to around R100 million more than the average R160 million.

“Unfortunately this year we were only able to pay for July and August, however when it came to September we realised that our cash flow was not okay.

“We then communicated with Eskom in advance saying that we do foresee that we might have a challenge so we requested to settle the debt on a later date, in October.”

She said they started paying in tranches from the end of September and they eventually settled the whole amount. “I am just happy that that we didn’t resort to taking the grants’ money because we do have grants and they are all cash-backed, but the municipality took a decision not to take those monies because they are not for that, they are for service delivery.”

Ndlovu-Gambu said the fact that the City’s debtors book had been gradually increasing over the years, despite attempts to get people to pay, was an indication of the culture of non-payment.

Msunduzi is currently owed close to R4 billion for rates as well as services and the defaulters include government departments.

She said the City had taken a decision to intensify its revenue collection efforts, hence the recent drive of disconnections. Ndlovu-Gambi said it was, however, disappointing that even people that were running profitable businesses decided not to pay for the very municipal services they used to operate their entities. “I know that we are being blamed that we are even disconnecting schools but unfortunately there is no subsidy that we are getting from the government, saying (for example) that don’t disconnect schools and we will pay Eskom. Eskom still needs its money from us and we have to get it from whoever is owing the municipality, including schools.”

Ndlovu-Gambu said Msunduzi depended on the revenue it collects from its ratepayers and residents to operate because it got very little equitable share. This is an unconditional grant from National Treasury that enables municipalities with limited own resources to afford basic administrative and governance capacity and perform core municipal functions as well as provide services to poor households.

“Our budget is mainly the money that we collect in terms of services and rates so if we are not getting the money from our consumers, it means that the municipality will not be able to deliver the services,” she said.

Besides Eskom, Umgeni Water is also one of the City’s biggest creditors with a monthly bill of more than R80 million, but Ndlovu-Gambu said the calculations indicated that a large number of people were not paying for water.

“There is never a point in the history of Msunduzi that the municipality has failed to pay for those services at the end of each month — whether people are paying or not …

“So it’s important to collect enough revenue so that we are able to meet those financial commitments in order to continue supplying water and electricity to our consumers.”

Disconnect the right properties

Ndlovu-Gambu said billing people correctly and getting the right properties disconnected was on her top priority list because the municipality had been getting a lot of complaints that some consumers were being incorrectly cut off.

On Wednesday she, along with the acting municipal manager Nelisiwe Ngcobo, met with the contractors who were appointed to carry out the disconnections. “We cautioned them against doing that (disconnecting the wrong people) and told them that they should carry out the instructions that are issued by the municipality only and they should not be taking money from people. Their job is to follow the list of disconnections that the municipality gives them. It’s not for them to go and negotiate or take money from people.”

The acting head of finance said urgently addressing queries received from the public was also a priority for her. She urged those who had queries to come forward so that they could be dealt with timeously.

However, she stressed that having a pending query did not exempt people from paying for the water and electricity they continued to consume after the query had been lodged.

“There are people who say I have a query that was lodged in 2016 and it has not been resolved then they stop paying and their debt escalates because they continue consuming services so by the time the matter is resolved, they are owing a lot of money.”

She said the City recently appointed a panel of more than 20 debt collection experts to strengthen its revenue collection team.

“We are going make sure that we collect whatever is due to the municipality — whether it is households, whether it’s government departments, whether it’s businesses — we are coming for you.”

Ndlovu-Gambu urged those who qualify for indigent status to come forward and register so that they could get free basic services and avoid being “unfairly” disconnected.

“I’m seriously cautioning our consumers that with the current panel that we’ve appointed, there will be a black Christmas for those who are not coming forward right now to pay and we are no longer taking [payment] arrangements that are not making sense.”

Asked to clarify what she meant by arrangements not making sense, she said some consumers prioritised paying for things that were not necessities such as DSTV and clothing accounts then put meagre amounts towards their municipal debt.

Read more on:    pietermaritzburg  |  msunduzi municipality

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