The latest report on eThekwini Metro’s finances has again highlighted numerous persistent challenges, including high water and electricity losses; declining revenue collection; and incorrect meter readings that negatively impact the metro’s financial standing.
City councillors said as a result of these problems, the metro faces a ballooning consumer-debt problem that is growing by millions of rand every quarter.
On Thursday, councillors were briefed on the state of the City’s finances in the budget statement for the quarter ending June 30, 2024.
In March, “The Mercury” reported that consumer debt was standing at R28billion.
At the time, close to R20.7billion was owed by the City’s households and R6billion by the business sector.
To assist defaulting consumers, the City reinstated the Debt Relief Programme which expired recently, with many residents signing up to be on this programme.
In June, shortly after the Debt Relief Programme was reinstated, it was reported that this resulted in thousands of residents and businesses making payment arrangements and hundreds of millions of rand being recovered by the metro.
The budget tabled on Thursday detailed some of the challenges.
It found that the cash-collection rate as slightly lower at 93% compared to the same period last year when it was at 93.58%.
“The committee raised concerns on water losses and requested a breakdown to establish the contribution by each component towards the non-revenue water. It expressed concerns that there has been a delay in migrating the meter-reading function to the City’s revenue unit.
It is being cited that meter reading is a major challenge within the City,” the budget statement said.
DA councillor André Beetge said the latest reports showed that the metro was now owed R31.9billion.
“Debt increased to R31.9bn; government debt was at R906million; and R556m was due by the KZN province.
A total of 136000 water and electricity meters, respectively were not read; with water losses at 52.5% and electricity losses above the 10% benchmark,” he said.
ActionSA leader Zwakele Mncwango said they had proposed that the Debt Relief Programme be extended but their proposal did not succeed.
“The programme expired at the end of last month. Many people are still coming forward to ask for help ... It had some success for the City as it was able to get back money it would otherwise not have been able to do,” he said.
Mncwango said the City was failing to address basic problems like meter reading and correct billing which is contributing to customers not paying.
“If the meter is not read for three months and is estimated, and the consumer gets a R100000 bill, do you think they will pay?”
He said the provincial government was also failing the City as it owed the metro nearly R500m.
IFP councillor Mdu Nkosi said they noted the growing debtors book as per the report compared to the prior year, and it was reported that this was due to collection being below 100%.
“The collection rate reported was 93%. Although the collection was reported to be high compared to other cities, the 7% not collected contributed to the increase.
“We have requested that the debt relief project be extended so that more people can settle their accounts and I understand the extension is being considered,” Nkosi said.
Mayor Cyril Xaba told the council that the matters raised had been discussed in detail by the finance committee as well as the executive committee.
Ish Prahladh, president of the eThekwini Ratepayers and Residents Association (ERRA), said the City is besieged by problems and should cast the net wider for other things that could bring in much-needed revenue.
“This new GNU needs to find ways of funding, not by borrowing but by having fundraising events and hiring out their white elephant buildings like city hall and stadiums which will elevate the burden from the consumers.
“Buildings that are sitting with no revenue, sell them and (fix) street lights that are on 24 hours. There are more things that can bring revenue into the kitty to help the consumer,” he suggested.
Prahladh said those making payments should be treated with compassion.
“First of all, address billing system problems and consumers need to be educated before cutting them off,” he said, adding that some elderly people struggle to read their statements.
The Mercury