Ballooning bad debt strangling the City
R9.4bn owing could put squeeze on services
BUSINESSES and individuals owe the City of Cape Town more than R9.4 billion which includes R1.3bn for indigent properties where the debt is unlikely to be recovered.
The City’s finance directorate sent a report to the finance portfolio committee showing it was owed R7.27bn by households and a further R1.48bn by businesses, with other outstanding debt totalling nearly R597 055.
“Although there is a reduction of R587 193 437 and R43 319 951 in residential and business debts respectively; it must be noted that in order to improve revenue collections, the City will continue enforcing payments of outstanding debts through effective debt management actions,” the report stated.
“Due to this debt, the City has to make a provision for bad debt in its budget, which means that fewer services are delivered.
“If those who have the means to pay refuse to pay for services that they use, it has a large impact on the sustainability of the City,” said Ian Neilson, mayoral committee member for finance.
The City’s finance directorate also stated in its report that there were a number of property owners who were tenants of City properties that are in arrears of R6.967bn as at the end of March.
The City’s chief financial officer, Kevin Jacoby, said: “It is therefore important for all property owners, the City’s public housing rentals and loans tenants or debtors and tenants or leased properties to pay their accounts in full on or before the due date or make arrangements to pay off their arrears debts over an agreed period of time, based on their ability to pay.”
During the month of March, more than 17 403 letters of demands were sent out and 1 132 debtors were listed for adverse credit listing. A total of 284 electricity prepaid blocking/daily charge collection letters were delivered and 327 accounts were sent for prepaid electricity purchases collection during March.
“If any resident’s water is restricted, electricity supply disconnected, prepaid electricity purchases limited or legal action instituted, then it is clear that they have ignored all the notices sent and not made any attempt to obtain assistance from the City,” Neilson said.
He added that residents were encouraged to visit their nearest municipal office for advice and guidance as soon as possible should they have any queries regarding their arrears.
The report also stated that three councillors owed the City R139 500 in outstanding debt.
Jacoby said that the councillors’ debt was as a result of high water consumptions billed. “The water department has investigated and resolved the investigations; payment arrangements are in place to settle the debts, which were finalised through the speaker’s office,” he said.
The City’s top 1 000 large debtors comprise mostly of commercial and industrial properties. As of the end of March, the total balance of outstanding debt was R1 328 552 611.
“The City needs everyone to contribute their fair share so that we can become an even more successful metro. Those who are in financial difficulties must approach us.
“Hoping that the debt will go away or ignoring the problem is not the answer and there is help on offer. As a caring City, however, we also make allowance for residents who are unable to pay for basic services to make representation to the City for relief… those struggling to pay their accounts must come into the City offices.
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Hoping the debt will go away or ignoring the problem isn’t the answer Ian Neilson MAYCO MEMBER FOR FINANCE
in the car with the registration licence removed and he saw Packham dressed in shorts and a T-shirt getting into the driver’s seat.
A second eyewitness, Thomas Govender, said he saw Packham leave Diep River station in his white Audi Q5 vehicle.
He remembered at least three digits of the registration plate, CA 724, which match Packham’s.
Packham denies driving his wife’s car or being at the crime scene where Govender might have seen him.
He said his wife could have been the victim of a hijacking.
Packham said he didn’t recall sending a text message to his mistress after his wife’s body was discovered saying, “This madness will all be over soon and we will be together forever.”
He denied telling his mistress that he was consulting divorce lawyers, but told the court his wife had consulted lawyers and they kept a draft divorce agreement.
The state argued that Packham had direct intention to kill his wife, while the defence argued that he should be acquitted on all charges.