NEWS24: R184 mln write-off

About R184 million in consumer debt under the uMgungundlovu Municipality will be written off as part of its amnesty programme, the municipality announced yesterday. The amount forms part of the R439 million debt from its indebted household and business customers.

The decision was taken as the municipality held imbizos for the 2015/16 budget and Integrated Development Plan. “The public pleaded with the municipality to consider an amnesty period to eliminate old debts, illegal connections and bypassed meters,” said district mayor and finance portfolio chairperson Yusuf Bhamjee.

uMgungundlovu Municipality took over the water and sanitation services from local municipalities and Umgeni Water in 2009. The Democratic Alliance has expressed unhappiness about the municipality’s decision, saying this was a “result of very bad management in the past”. “Most of this debt came when the uMgungundlovu Municipality took over. We believe a great deal of information was lost at that time and not much care was taken during the takeover,” said DA Roger Ashe.

He said with the loss of vital information, the municipality could not determine “exactly who owed what”. “This is unacceptable and there is also that technical issue of the interest accumulated on that money,” added Ashe. In addition to the amnesty programme the municipality said they have reviewed the credit and debt control policy and will now allow customers who have outstanding debt to enter into arrangements to pay off their debt over a maximum period of 36 months instead of the previous 12 months.

Further to that, the policy will allow indebted consumers to pay an upfront 30% of the existing debt as opposed to the previous 50% requirement. “Our observation as the district has been that customers have failed to meet their obligations on the signed arrangements in the past and further struggled to raise the 50% down payment.

“This flexibility will assist those who will take advantage of the amnesty programme,” said uMgungundlovu District Municipality CFO Sinegugu Ncube in a statement released yesterday. Customers now have up to the end of November 2015 to take advantage of the amnesty programme.

Councillor Mbongeni Madlala of the Inkatha Freedom Party said they welcome the debt write-off and are “happy” with the municipality’s decision. “There are people who are now unemployed and have severe personal and financial problems. An arrangement should be made or their debt written off completely,” said Madlala.

In the press statement, CFO Ncube said customers who default on their current billing, amnesty agreement or acknowledgement of debt agreement will be charged interest and “amnesty terms may be forfeited”. This will result in disconnection or restriction of services.

“We urge our customers to carefully select an affordable relief package from that which the municipality has availed,” said Ncube. The municipality said that its collection rate has increased from 50% to 64% as of the end of March this year. “The district will continue to implement water restrictions for households that owe the municipality, while businesses will be disconnected,” said Bhamjee.

The municipality has advised customers who want further information on the amnesty programme to contact their nearest customer care centre or billing Unit for arrangements. Read more here