The eThekwini Municipality’s consumer debt continues to increase and it is now standing at close to R27 billion.
However, the City said there was no reason for alarm.
The report detailing the City’s finances ending in September showed the debt was R27bn – an increase of R5.6bn from the same period last year and R2bn more than in June this year.
But in response to questions, the municipality said the picture had changed marginally because some parastatals that had contributed to the debt were now up to date.
The September report had shown that parastatals were contributing around R354 million to the debt, with Transnet owing R271m and Prasa owing R41m.
“We do not discuss customer-related matters with a third party. However, the response is positive among some. Transnet is up to-date, Sanral is up to date, Prasa is up to date and others. There are further ongoing engagements with national and provincial departments, and as a result, some have paid their old debt.”
This could mean the debt is now standing close to R26.8bn when removing just these two accounts.
The City also said the rise in debt was mainly due to the billing of annual rates at the beginning of the financial year, which amounted to R1.8bn but only payable on October 31.
Regarding household debt which includes individual/residential customer accounts, the report said it contributed 78% of the total debt.
The City said it was seeking to deal with this debt and was first assessing its customer base so that it could update the indigent register before embarking on a detailed debt collection process.
The municipality also emphasised that there was no increase in the number of debtors defaulting and that it had collected 100% of the revenue billed for the first four months of the current financial year: July to October.
The total debt has not dropped yet due to the historical debt of R25bn which attracted monthly interest.
Councillors said the debt situation pointed to the growing pressure faced by residents.
Alan Beesley of ActionSA said the report painted a troubling picture as the amount owing to the municipality continued to increase.
“Not only is the debt continuing to increase, but of major concern is that the average increase is getting higher every month. ActionSA is deeply concerned that the amount of debt owed to the municipality is increasing unabated. This increasing debt will shortly lead to a cash crunch in the municipality which will negatively impact on the current low levels of service delivery.
“The increasing debt does highlight that residents and businesses of eThekwini are under huge financial pressure.
What is unacceptable is the high debt owed by government departments and parastatals,” he said.
DA councillor Warren Burne said the amount owing to the municipality was cause for great concern.
“The biggest concern is the amount owed by ordinary households. This is a social crisis. I don’t think the municipality has grasped the seriousness of this debt. Of particular concern is the amount owed by thousands of municipal employees, including many in senior and middle management.”
As for its debt relief programme, the City said it only began on October 2 and the first report was due after 10 working days in November. “This will indicate the financial impact.”
The Mercury