R1.9bn consumer debt crisis

COLLECTION ISSUE: CHDM mayor Wongama Gela reporting on the municipal finances for the previous quarter during an ordinary council meeting on Wednesday Picture: ANDISA BONANI

The Chris Hani District Municipality (CHDM) was owed a possibly-irrecoverable R1.9bn at the quarter ending September by its consumers in all six municipalities, which is evidence of the institution’s low revenue collection rate.

The total cumulative debt was determined on the basis of being more than 90 days in arrears.

Komani alone owes a total of R10 546 408.33 for water and sanitation and the CHDM only managed to collect 31% of the amount, while Emalahleni municipality owes R2 413 679.47 and only paid R2% of the amount.

CHDM mayor Wongama Gela indicated there were many challenges that must be addressed in the water and sanitation services by the municipality since it took over the function from local municipalities in the 2014/15 financial year.

“Billing has been done in all local municipalities under the CHDM and we need to implement the revenue enhancement strategy to improve our revenue base and to ensure long term financial sustainability.”

Municipal public accounts committee (MPAC) chairperson Yanga Zicina said the municipality’s dwindling revenue collection rate was detrimental to the finances of the institution and strict measures must be taken to ensure the money was recovered.

“We need to take serious steps in ensuring that we collect what is owed to us and that those who are indebted to us actually make payments. The R1.9bn consumer debt is too big an amount for us to be complacent about not being able to recover it.”

Zicina said the municipality also struggled to spend millions of money in the last quarter which must be guarded against as it trampled on service delivery strides.

The municipality recorded R19 776 961.91 in irregular expenditure which council recommended it be investigated by MPAC.

 

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