Consumer efforts by the metro to ease the financial burden faced by ratepayers, consumer debt at the eThekwini Municipality continues to balloon and now stands at R28 billion.
Opposition parties said the billing errors contribute to residents being faced with huge bills that overwhelm them.
The City budget statement for the month ending in January was discussed during a council meeting on Tuesday and it raised concerns among the city councillors.
Councillors said that the close to R20.7bn owed by the City’s households and R6bn by commercial enterprises, is an indication that residents and business are battling.
The report detailing the City’s finances ending in September last year showed the debt was R27bn – an increase of R5.6bn from the same period last year and R2bn more than in June 2023.
The Mercury reported last year on consumer debt and at the time it was around R27bn with households owing close to R19bn.
The municipality has been trying to reign in the debt through the debt relief programme, where customers who are in arrears can make arrangements to pay their debt over a period of time.
DA councillor Caelee Laing, said the city’s residents are battling and their suffering is compounded by the City’s billing errors which if contested, still has to be paid while the City investigates.
“The commercial debt is at R6.5bn and household debt is at R20.7bn. The City does not read meters and then hits residents with exorbitant amounts,” she said, adding that meters are estimated either too high or too low.
She said reports showed that for water meters there are 161 252 not read for between 181-365 days, and – 80 218 not read for over 365 days.
For electricity: 43 175 have not been read for between 181–365 days, and 19 977 are unread for over 365 days
She said water losses are more than 55% and yet leaks run unattended for weeks due to staff shortages.
DA councillor Warren Burne said he was especially concerned about the debt that is owed by the City’s bus company Tansnat, which Burne said should be more than R1.2bn now.
“It is incredulous that the City can go and borrow money that is equal to the money it is being owed by its biggest debtor. We need to know what is happening with the debt and how it keeps increasing at the rate of R20 million a month,” said Burne.
He said when it comes to the issue of the buses, they have been told for the last 8 years that there is a legal process under way but it was time that the mayor or the city manager informed the residents about the matters in dispute and what the next step is.
“I do not believe that the mayor Mxolisi Kaunda is acting in the best interests of the municipality by allowing the issue to drift on indefinitely while the debt escalates at about R 250m to R300m per year,” said the DA councillor.
ActionSA councillor Alan Beesley said they are extremely concerned about the ballooning consumer debt.
“This increasing debt will have a major impact on the cash flows of the municipality which will further compromise the current low levels of service delivery. The ballooning debt is indicative of the increasing financial pressure that residents and businesses are under due to a collapsing economy. The fault of which lies directly with the ANC leadership of the city,” said Beesley.
EThekwini mayor Mxolisi Kaunda said on the issue of Tansnat, they are waiting for a court date to settle the matter.
“We are investing billions on infrastructure to deal with issues of water,” said the mayor.
On the issue of debt, he said: “We continue to apply credit control policies to ensure we collect the outstanding debt.”
He said the City was far ahead of its counterparts when it comes to responding to the plight of the poor and business, as it has implemented the debt relief programme.
The mayor said the City is implementing a programme to deal with water leaks to reduce water losses and they are starting to see the results.
Economist, Professor Irrshad Kaseeram said all the statistics indicate that South Africans are in deep trouble financially including the middle class.
He said debt default is alarming, with “the proportion of households with more than one loan on default at 45.5% and salaries on average have increased below the inflation level”.
“The municipality has to restructure the debt of beleaguered consumers by allowing them, on a negotiated basis, to pay it off over the medium- to long-run while encouraging them to sparingly consume water and electricity on an ongoing basis,” he said.
The Mercury