Tshwane writes off billions in municipal debt through relief scheme
Tshwane writes off billions in municipal debt through relief scheme
The Tshwane metro has written off more than R4.4-billion.
The metro received more than 20 000 amnesty applications from residents who tampered with electricity meters and more than 1 000 applications under its incentive and debt relief scheme by the May 31 deadline.
Metro spokesperson Lindela Mashigo said, 'A total of 20 056 amnesty applications from those who tampered with electricity meters were received.
'The number might rise slightly as counting wraps up. For the incentive and debt relief scheme, we received 1 033 applications, with a total debt of more than R147-million.'
Mashigo said the metro reported a late rush in submissions.
'More than 50% of the applications were received in the last week before closing,' he said.
All applications received under the debt relief scheme have already been approved.
This initiative, championed by Deputy Mayor and MMC for Finance, Eugene Modise, was designed to ease the financial burden of municipal debt and provide residents with a clean slate.
According to Mashigo, some settled with a component of arrangements which allowed applicants to benefit from partial write-off after entering into payment agreements.
As for the electricity amnesty process, which targeted illegal meter tampering, the metro said it already captured 17 140 of the 20 056 forms, and 10 741 were issued to the electricity department.
However, only 300 have been normalised so far, a small fraction given the scale of applications.
'The process is ongoing until all legible [applications] have been normalised.'
Mashigo said that while the debt relief approvals are nearly finished, the amnesty programme is still in progress.
'One month from now for debt relief is the expected turnaround time, but for tampered meters, the period might be slightly longer, depending on the electricity department.
'The total value of municipal debt written off through the combination of indigent relief, inactive accounts, and incentive schemes stands at a staggering R4.4-billion.'
He said the incentive and debt relief scheme helped write off R66.4-million in debt owed by 918 residential accounts and 66 businesses, who together owed R147.4-million.
Of this, R81-million was either collected or arranged to be paid.
'The scheme is not a simple debt write-off arrangement.
'The metro incentivised customers to settle a portion of their municipal accounts and/or enter into a settlement arrangement to benefit from a write-off of a portion of the debt.'
Although the amnesty campaign focused exclusively on electricity, the incentive scheme covered all services, including water, refuse, and sanitation.
The metro did not separate electricity-specific debt from the rest of the write-offs.
Mashigo said on the indigent relief side, about R2.4-million was written off from 85 361 indigent accounts, an intervention aimed at aiding the poorest residents.
The metro plans to review the effectiveness of the campaign, and the outcome of that review will inform the next course of action.
Mashigo said Tshwane's credit control and debt collection policy remains the central guide in future financial strategy.
This policy includes ongoing recovery measures such as disconnections and prepaid blocking.
'Measures such as credit control activities, disconnection of services and prepaid blocking are implemented to recover revenue for services consumed.
'The metro's revenue recovery has been enhanced by the R81-million recovered or committed to through arrangements.'
Also Read: BEE is bringing South Africa's economy to its knees – new report
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