Municipality tries a bit of carrot and a bit of stick
ADM in dire financial straits as service user debt mounts
Cash-strapped Amathole District Municipality is owed over R49m by local businesses operating across its eight local municipalities.
The defaulters are sinking the embattled council deeper into debt. Households and government institutions owe the district authority R968m and R13.5m respectively.
To try to recoup the money, the municipality said it plans to disconnect water supplies to its debtors. At the same time, the municipality is dangling a 50% rebate carrot in front of the debtors.
However, the National African Federation Chamber of Commerce (Nafcoc) has disputed the R49.4m figure.
Asked about measures to be taken should the debtors fail to pay, ADM spokesperson Noni Madikizela-Vuso on Wednesday said: “We have started the process of disconnecting water supplies across all municipalities. At the moment we have introduced an incentive scheme, which was adopted last Friday by council, where we offer a 50% rebate to consumers who apply for this one-off initiative. It runs for a period of three months.”
Asked if they were not violating human rights by depriving people of water, Madikizela-Vuso said: “We cut supply to business premises, we understand businesses cannot operate without water.
“This is a way to encourage them to come forward, not necessarily to spite them.
“We need to meet each other halfway and come to some arrangement. It can’t be that they continue consuming services and not paying for them.”
ADM acting mayor Zibuthe Mnqwazi said the business debt had been R77m before November but they had reduced it to R44m with an aggressive revenue collection drive that brought in R33m.
Explaining how the debt had increased again, Mnqwazi said: “The increase is due to an increasing business sector which is not paying debts, though enjoying the services.”
Mnqwazi said businesses in Butterworth’s Mnquma municipality were the biggest defaulters, accounting for R19.2m of the R49m. This is followed by businesses in Mbhashe and Amahlathi municipalities, which owe R7.5m and R5.9m respectively. Those in Raymond Mhlaba owe the district authority R8.9m. Nkonkobe accounts for R1.7m. Ngqushwa and Great Kei businesses owe R3.3m and R2.6m respectively, said Mnqwazi.
Nafcoc Mnquma chairperson Zukile Mbeleni accused the ADM of overcharging and having incorrect billing systems.
“We resolved in a meeting last Friday to write to the ADM management and arrange a meeting to discuss lots of discrepancies that we pick up on the account letters.
“We have members who had dry taps for months in our area yet the meter reads and the municipality bills them.”
Mbeleni said most members of the chamber had multiple properties across the province, including in metros.
“We noticed that for the little services we get here at this rural ADM, we are charged more than the metros.”
Mnqwazi said revenue enhancement was key to ensuring a sustainable municipality.
“The reason and point of ensuring an effective method of revenue collection is for the sole purpose of improved or enhanced collection from those owing the municipality.
“It is why the ADM has since started with a process that will ensure that no revenue-paying individual or businesses are underor over-billed and in worst case scenarios go without being billed.”
Mnqwazi said while the business sector was struggling to pay its debts, government institutions were doing well.
He said the revenue collection drive “will continue until all outstanding debt has been fully serviced”.
While government departments and parastatals have sometimes also been guilty of owing large amounts for services, Mnqwazi said there had been improvement.
“The future outlook is of us being in a position where we are able to execute our legislated mandate of providing sustainable service delivery in the form of clean water and sanitation services to our communities,” he said.
We need to meet each other halfway and come to some arrangement
Noni Madikizela-Vuso Amathole District Municipality spokesperson