The debt relief programme introduced by the eThekwini Municipality last year will collect more than R1 billion from customers who have entered into payment arrangements with the City.
The City announced on Tuesday that the programme will be reintroduced for another four months, from April until July 31.
eThekwini is battling ballooning consumer debt and is currently owed close to R29bn.
The report tabled before a council meeting said while the last round of the programme between October and December last year had some challenges due to external economic factors, it had attracted interest and many ratepayers had tried to keep up with their commitments.
There are conditions and benefits to being part of this programme, including that customers would have a portion of their total debt written off if they keep to the conditions of their agreements with the municipality.
Customers that are 90 days in arrears are allowed to sign a payment arrangement with 0% down payment for non-profit organisations, 5% for residential customers and small business/SMMEs and 10% for non-residential customers, excluding government departments/institutions and parastatals.
The interest accumulated will be written-off once the payment arrangement has been entered into.
Motivating for the reintroduction of the programme, the report said the number of ratepayers that had taken up the programme last year had doubled from previous similar programmes.
It showed that more than 15 000 consumers had taken up the programme and in October the collection rate achieved with those was around 85%; this climbed to more than 95% in November and dropped slightly to around 90% in December.
During those three months, arrangements entered into were valued at R1.1bn, R112 million was received from owing customers as down payments and R126m of total debt was written off.
“Although the debt relief showed some positive results, due to the limited time of the debt relief and the relief running during the festive season some people were not able to take advantage of the relief, which resulted in the debt relief not fully achieving the intended outcomes,” said the report.
“The debt relief was run at a time when the municipality had challenges with meter reading contracts and customers had to sign the debt relief on estimated bills.
“It was only after the debt relief period had ended that the municipality was able to read meters. The subsequent meter reading resulted in high current consumption which then resulted in customers not being able to maintain the arrangements made on amounts to be paid and the current consumption.
“Therefore, a need exists for the council to reconsider the debt relief programme, as the termination of the debt relief has caused an outcry and many customers have requested for the relief to be extended,” it said.
IFP councillor Jonathan Annipen said the party had called for the relief programme to be reinstated last year and put forward a motion two months ago.
“This type of recourse provides massive relief to those who need it the most, additionally the results (of the programme) show an increase in revenue collection for the city. We encourage residents to take advantage of this and keep to its conditions.”
ANC councillor Mthokozisi Gasa said the party had recognised the plight of the ratepayers and that was why it felt it necessary to reintroduce the programme.
ActionSA councillor Alan Beesley said the initiative was welcomed.
“It must be stressed that many residents and businesses have fallen behind with their accounts due to the mismanagement of the ANC-led municipality.
“Residents and businesses have had higher than inflationary tariff increases imposed on them, which for many has become unaffordable.”
The Mercury