Fury from firms amid claims Joburg City is broke

JOBURG’s debt-collecting service providers are livid after going months without being paid due to the City allegedly being “broke”.

This, they said, was crippling businesses and may lead to them retrenching staff.

This seemingly contradicts mayor Herman Mashaba’s ambitious goal of 5% economic growth in Joburg by 2021 by creating an environment for small and medium-sized businesses to thrive.

The Cape Times’ sister publication, the Star spoke to four fuming firms, which are part of Joburg’s Attorney Debt Collection (Attcol) panel, a body which collects between R400 million to R500m a month in historical debts according to internal City records The Star has seen.

An irate attorney, who said he was owed over R5m, claimed his firm was not paid from September and only received a partial payment for his September and October invoices. He said he was yet to receive payment for November, December and January.

He said this was crippling his business because he has overheads and expenses of up to R400 000 a month, which he was unable to meet anymore.

His views were echoed by another panel member, who said it was unfair that they continued collecting money for Joburg, which receives money straight into its account, but they don’t get paid.

“I have been asking them what the real story is, without receiving a straight answer.

“But I have been reliably informed that the City does not have money. Apparently they ran out of money as far back as December,” said the lawyer, who requested anonymity.

He claimed that he was also owed about R5m.

His contentions were supported by a high-ranking source within Joburg’s finance department, who said the City won’t fail to pay a R3 billion shortterm loan from the Development Bank of Southern Africa (DBSA), the repayments of which are due in June.

Mayoral spokesperson Luyanda Mfeka rubbished assertions that Joburg was broke, pointing to the Auditor-General’s report showing the city closed the financial year with cash and cash equivalents of R3.1bn.

Mfeka said delays in paying Attcol panellists was a result of their contracts coming to an end, saying the contracts were being extended since 2015.

He added that this breached competitive processes where the City had to undergo a process to “legitimately re-establish the Attcol panel”.