Buffalo City Metro will write off more than R140-million owed for rates and services by indigent debtors.
The debt write-off of close to 35000 indigent debtors across the metro was approved by council last Friday.
According to a council document the total amount owed by the 34916 indigent debtors was R140318861 (excluding VAT) for the period ending August 31 2014.
BCM spokesman, Keith Ngesi said the period for which the money was owed would differ from debtor to debtor.
Acting chief financial officer Siyabulela Peter in a report presented to the finance portfolio committee said indigent debtors were not settling their debts after the indigent subsidy and rates rebates were granted. Only minimal credit control action could be applied to collect the debt.
“With every monthly billing period in terms of credit control policy, the indigent debtor is expected to pay the balance of the account.
“If they fail to pay the debt their electricity is placed on a “G” block- type, meaning for every rand tendered for electricity 40c is applied to the outstanding debt.
“However, many indigent debtors only consume the free electricity and do not purchase,” said Peter.
The list of the proposed bad debt write-offs was distributed to councillors in October last year.
DA caucus leader, Terence Fritz said while they welcomed the fact that indigent debtors would be able to
start with a clean slate, there were concerns whether the metro had a plan in place to prevent this from occurring again.
“Write offs have been done over and over but we are still faced with the same challenge of not being able to recover debts owed by indigent debtors,” said Fritz.
Fritz referred to one debtor from Dimbaza who owed BCM more than R200000 for rates and service.
“BCM should ask themselves how did we allow that consumer to accumulate such a high debt before just writing it off,” said Fritz.
BCM PAC councillor shared the same view saying the amount of money owed by some of the debtors was “questionable” and needed to be followed up on.
A breakdown of the debt showed that more than R1-million was for electricity, more than R20-million for rates, R27-million for refuse collection, R23.5-million for sewerage, R8.5-million for sundries and the amount owed for water was close to R60-million.
Ngesi said the debt would be written off during this month.
“The debtor’s account will reflect the write-off and letters will be sent to the applicable debtors,” said Ngesi. — arethal@dispatch.co.za
Metro to write off R140m debts
The debt write-off of close to 35000 indigent debtors across the metro was approved by council last Friday.
According to a council document the total amount owed by the 34916 indigent debtors was R140318861 (excluding VAT) for the period ending August 31 2014.
BCM spokesman, Keith Ngesi said the period for which the money was owed would differ from debtor to debtor.
Acting chief financial officer Siyabulela Peter in a report presented to the finance portfolio committee said indigent debtors were not settling their debts after the indigent subsidy and rates rebates were granted. Only minimal credit control action could be applied to collect the debt.
“With every monthly billing period in terms of credit control policy, the indigent debtor is expected to pay the balance of the account.
“If they fail to pay the debt their electricity is placed on a “G” block- type, meaning for every rand tendered for electricity 40c is applied to the outstanding debt.
“However, many indigent debtors only consume the free electricity and do not purchase,” said Peter.
The list of the proposed bad debt write-offs was distributed to councillors in October last year.
DA caucus leader, Terence Fritz said while they welcomed the fact that indigent debtors would be able to
start with a clean slate, there were concerns whether the metro had a plan in place to prevent this from occurring again.
“Write offs have been done over and over but we are still faced with the same challenge of not being able to recover debts owed by indigent debtors,” said Fritz.
Fritz referred to one debtor from Dimbaza who owed BCM more than R200000 for rates and service.
“BCM should ask themselves how did we allow that consumer to accumulate such a high debt before just writing it off,” said Fritz.
BCM PAC councillor shared the same view saying the amount of money owed by some of the debtors was “questionable” and needed to be followed up on.
A breakdown of the debt showed that more than R1-million was for electricity, more than R20-million for rates, R27-million for refuse collection, R23.5-million for sewerage, R8.5-million for sundries and the amount owed for water was close to R60-million.
Ngesi said the debt would be written off during this month.
“The debtor’s account will reflect the write-off and letters will be sent to the applicable debtors,” said Ngesi. — arethal@dispatch.co.za
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