Water Debt – Municipality to Write Off R300 Million

A water debt amnesty will be implemented by the Eastern Cape OR Tambo District Municipality for households, businesses, schools and NGOs, Executive Mayor Nomakhosazana Meth announced on April 6.“The institution offers 70% as amnesty for the domestic households, churches and private schools debtors no matter the aging,” Meth said.

Accordingly, these debtors will only have to pay 30% of their water debt confirmed the Mayor. However, they will have to pay half of the outstanding debt immediately with current billing. “Where the remainder is not paid within nine months including monthly billings, the amnesty falls away and the full debt amount is payable,” said Meth.

Water Debt Amnesty

The municipality will write off R299.7 million in water bills, when it implements the debt amnesty. The mayor explained that the municipality had adopted a “Yizani Sakhe” strategy through the council to collect revenue. “Our Revenue Strategy is based on the premise that local government has a legal right to impose property taxes, fees and user charges in accordance with its assigned fiscal power, and that it should recover adequate revenues to cover spending responsibilities.” Meth asserted.

Meth said the strategy took into consideration the financial troubles of the people of the O.R Tambo District Municipality. “Yizani Sakhe as the strategy recognises that addressing the consumer debt problem is a mammoth task. The strategy serves to address cost cutting measures in particular the reduction of water losses,” Meth explained.

Business Debtors

In August 2015, households owed R381 million and NGOs R11 million in water debt – that’s R392 million or 86% of R457 million debt in total. While businesses owed R50.6 million – 11% of total water debt. “The offer by the institution is to effect amnesty for the business debtors by writing off 50% of the debt for each consumer no matter the aging,” stated Meth.

The debt amnesty will relieve business debtors of 50% of their water debt said the mayor. Half of the outstanding amount must be paid at once with the current billing. While another 25% must be paid within six months of the debt amnesty coming into effect. If, after six months, the debtor has failed to pay, the amnesty will lapse and debtors will owe the full amount.

Government Debtors

In August 2015, government debtors owed an amount of R 14 million in water debt. However, government will not benefit from the debt amnesty. Instead, strict credit control and debt collection policies will be implemented. Consumers who reliably pay their water accounts on a regular basis will receive a 5% discount on their bill. But, only if they make payments before the 7th of the next month of billing said Meth.

Consumers will receive discounts for six months and, should they fail to pay on any month, they will no longer be eligible for these discounts. The municipality will also be implementing a process for writing off any debt that results from leakages.