City of Tshwane Deputy Mayor and MMC for Finance Eugene Modise is encouraging Tshwane residents to take advantage of a debt-relief programme meant to assist customers to bring their municipal accounts up to date.
The proposal is outlined in a council report approved in February, focusing on recouping a whopping R30 billion in unpaid debt.
The report highlighted that debtors could see up to R10bn in debt cancelled for residents struggling to service their outstanding municipal accounts.
It has a detailed breakdown of the City's debtors, categorising them into distinct groups, which include residential customers saddled with a total debt of R15,833bn, followed by business customers, who owe R6,746bn.
On the other hand, the indigent customers owe R2,632bn, the government owes R1,793bn and inactive accounts make up the remaining R1,751bn.
The report said: “Analysis of the proposal for residential accounts as of 30 November 2024 indicates that should customers take-up the offer an amount of R1,765bn will be for immediate collection and R4,220bn will be subject to deferred collection. The debt-relief component amounts to R9,847bn constituting 70% of the total debt.”
Modise said the National Treasury has set a threshold for revenue collection at 95%, and Tshwane’s collection rate is hovering at around 90%.
He expressed concern that the massive debt amount is not only alarming but also significantly hinders the city's ability to deliver essential services efficiently.
“It is against this backdrop that the City of Tshwane decided to implement a debt relief programme, whose aim, inter alia, is to provide financial relief to hard-pressed, residents, businesses, deceased’s estates, indigent and child-headed households. The programme, which came into effect this month, will run until June 2025,” he said.
He said customers that voluntarily report tampering with electricity meters will qualify for a tamper fee waiver, provided they agree to the installation of a new meter and a protective device.
He explained that any other outstanding debt will be handled in accordance with the city's credit control and debt collection policy.
“The amnesty waiver on tampering and illegal connection ends on 31 March 2025,” he said.
Modise said residential customers that settle 12-months of municipal debt in full will qualify for a 70% debt write-off on any outstanding debt older than 12-months.
“To qualify, the residential customer must arrange a structured payment plan for the remaining 30% of the principal debt, in line with the city's credit control and debt collection policy,” he said.
He said residential customers with debts less than 12 months old are required to pay the full principal debt amount and will receive a 100% write-off of accrued interest.
Modise said: “Residential customers with up-to-date accounts qualify for a 25% discount for visiting City-owned recreational facilities, such as the Rietvlei nature reserve, community halls, and swimming pools. Simply present your latest municipal account statement to enjoy this benefit.”
The scheme extends its benefits to businesses through short-term and long-term business incentives.
Businesses can take advantage of a generous offer by paying three years' worth of municipal debt in a single, upfront payment. In return, they will receive a 100% write-off on any outstanding debt older than three years.
Modise said: “Businesses that owe the city for less than three years and can manage to pay the principal debt in full, will qualify for a 100% interest write-off. Additionally, miscellaneous charges such as final demand and disconnecting notices will be waived.”
He said indigent customers and child-headed households will receive a 100% debt write-off.
“However, customers are responsible for the payment of any consumption exceeding the allocated subsidy of 100kWh of electricity and 12kl of water,” he said.
The city has made special provisions for deceased estates, requiring them to settle municipal debt incurred within the last two years in full to allow the city to write off any outstanding debt older than two years.