Bay cuts fee paid to debt collectors
Service provider ‘doing commendable job’ but feels effects of city’s cash-saving efforts
NOT happy with how much it was paying a debt collection firm to recoup old debt due to the city and to verify accounts, the Nelson Mandela Bay Municipality has altered the contract and halved the fee.
Debt collection firm EOH Mthombo was hired a year ago to verify accounts and collect from people whose bills were overdue for more than four months.
The municipality was paying EOH R14.82 to physically verify and collect the data of each debtor. That has now been reduced to R7.41 per meter.
A reduction in the amount paid to the company will save the municipality millions of rand, although budget and treasury portfolio head, councillor Retief Odendaal, was not yet sure of exactly how much.
The metro’s contract with EOH does not extend to residents who are benefiting from the indigent policy and to high-energy users.
The municipality has a threeyear contract with EOH.
Odendaal said the city had to amend the service level agreement (SLA) with EOH because there were duplications and some uncertainty.
“The SLA did not clearly state the outcomes or what needs to be achieved,” he said.
Odendaal said EOH was briefed to enhance the city’s revenue by going from house to house to verify meters.
“The contract also states that all debt that is over 120 days must be handed over to EOH.
“The problem with that is we have that function in the municipality, so it is a duplication.”
Odendaal said they had to amend the agreement and reduce the amount they paid EOH.
“We said there is no way we can pay so much. We have strict credit control measures.
“Between the [chief financial officer] and me, we are dealing with accounts of government departments, businesses,” he said.
Asked what EOH’s reaction was to the amendment, he said: “They should be fine with it. The reality is we are the client and we must get value for money.
“We need to clarify going forward what their role is. We cannot have a duplication of what we do.”
Odendaal, however, said EOH had been doing a commendable job as about 24 000 meters had been verified which were not on the system.
“I am sure in the next few months we will see more results, especially a reduction in non-revenue water.
“These meters were not billed and the water used was counted as losses," Odendaal said.
EOH’s Leslie Reddy did not want to comment and referred questions to the metro.
The council approved the reduction of the amount paid to EOH earlier this month.