PMB wants ratepayers to pay accounts in advance to upgrade electricity infrastructure
Durban - THE MSUNDUZI Municipality is looking to its ratepayers to raise millions of rand needed to upgrade its ageing and fragile electricity infrastructure.
The municipality has put forward an ambitious proposal to encourage ratepayers to pay their accounts a year in advance.
This money will go towards funding the desperately needed upgrades to the city’s electricity infrastructure.
The city electricity infrastructure is under pressure, fragile, unreliable and prone to constant outages.
Since the beginning of the year, there have been almost daily reports of areas experiencing faults.
The proposal, titled Covid relief plan was first tabled before the finance portfolio committee last week and councillors held a workshop on Monday where it was again discussed.
The plan will be paired with a debt relief programme that will offer discounts to struggling customers.
The municipality said it had implemented a number of revenue enhancement initiatives that had not yielded the required and expected outcomes.
The challenge with most of these initiatives has always been implementation, it said.
It added the funds advanced by ratepayers would be ring-fenced and used for infrastructure development, particularly for electricity network upgrades.
“There has been extensive talk with big business about this and the municipality has established that there is an appetite for this kind of offer,” said the report.
Msunduzi Municipality debtors manager Marlon Hoskins said asking customers to pay in advance was better than borrowing money from banks. He said the city would use the money to fund its electricity infrastructure needs.
Explaining how it would work he said, for example, a customer who has a monthly account of R1 000 will be asked to pay R12 000 at the start of the financial year in June. The city will deduct a R1 000 each month on reducing bases from the customer’s account and the interest generated will be credited to the customer’s account.
The report also said the Revenue Business Unit was proposing a Covid-19 relief campaign for a period of one year, the campaign will be open to all categories of debtors with arrears balances as at September 30, 2020.
It said business debtors would get a 25% discount on the services arrears balance as at September 30, 2020 and 100% discount on the rates interest. Household debtors will get 30% discount on the services arrears balance as at September 3, 2020 and 100% discount on the rates interest.
Other debtors will get 30% discount on the services arrears balance as at September 30, 2020 and 100% discount on the rates interest.
Indigent debtors, Public Benefit, Religious and Non Profit Organisations will get a 50% discount on the services arrears balance as at September 30, 2020 and 100% discount on the rates interest.
All debt to be paid with 50% deposit and the balance of the debt (less the discounted amounts) to be paid in three equal instalments. It said discounts to be applied to the account after the last instalment is paid or after the debt is settled (if paid in a single instalment).
DA councillor Sibongiseni Majola said they were in support of the initiative as it could help the municipality improve its finances.
“The only concern we have is that coming with all these relief plans discourages customers to honour the agreements they have already made with the municipality.”