DURBAN - ETHEKWINI Municipality’s recent disconnection of electricity for one government department illustrates the city’s tough stance in recouping millions of rand owed to it by government departments and other parastatals.
This was said by acting city manager Musa Mbhele when he briefed senior councillors during the executive committee meeting yesterday.
He was responding to questions on how the city was dealing with government customers sitting with millions of rand in unpaid debts. Mbhele indicated that the city was going after the main culprits contributing to the municipality’s ballooning debt.
DA councillor Nicole Graham questioned the city’s political will to go after defaulting government departments. She said it was easy for the municipality to disconnect individual households as opposed to government departments.
However, Mbhele pointed out that in recent weeks and months a massive effort had been undertaken to recover money owed to the city, including:
- Meeting with the national Treasury over government debt, especially from departments and parastatals. The meeting took place in August.
- Getting the green light from Deputy Finance Minister David Masondo to roll out the city’s plan.
- Rolling out the city’s cash recovery plan.
He said the roll-out was beginning to bear fruit and served as a lesson to other errant departments to start paying for services rendered by the city.
“We had a case where we cut off the electricity supply to one department that was owing the city millions of rand. Upon embarking on this action we received R150 million, with an undertaking to get the outstanding amount in due course. We are starting to see (action) from our strategy,” Mbhele said.
Councillors applauded the move to recover money owed to the municipality, saying the move would help stabilise the city’s debtors book.
“Some of the biggest debtors are government and parastatals, and we must start to play hard ball in the same way that the city goes after residents,” Graham said.
The city revealed yesterday that as of December 31, it was owed R1 billion in government debt.
EThekwini, like many other municipalities, has been battling to get government departments and parastatals to pay, with debt in the past running into billions of rand. Although residential and business debts have been part of the ballooning debt, it was the government debt that emerged as the biggest headache.
This development has in the past necessitated Co-operative Governance and Traditional Affairs political heads meeting with their treasury counterparts with limited successes recorded over the past years.