Business 16.1.2018 09:49 am

Help, City of Joburg is killing my business!

Help, City of Joburg is killing my business!

Electricity billing dispute has Ice for Africa on its knees.

George Peters, owner of the 26-year-old Ice for Africa doubts whether his business will survive the next few weeks after his power supply was cut following a billing dispute with the City of Joburg.

Ice for Africa produces ice on a site spanning seven plots in Delarey, Roodepoort, which is in the jurisdiction of the City of Joburg.

The business that distributes ice to about 1 000 customers in four provinces, including branches of Pick n Pay, Spar, Shoprite, OK stores, garages and bakeries is electricity intensive. It has the capacity to produce 30 to 40 tons of ice daily and has purification and packaging plants on site as well as storage capacity for 1 000 tons of ice.

According to Peters, the property in question uses about R100 000 worth of electricity per month. It is one of six neighbouring properties on which his business is situated.

He says he has had issues with the municipal billing on the site since he bought it in 2012.

This however intensified at the end of 2016 and into 2017 when the City of Joburg stopped sending him bills for the property, because it was consolidating the bills for three of the properties.

Not knowing what the new account number of the consolidated account would be, he kept a reserve for the day he would be able to pay.

Around April/May last year he eventually got the bill, but it was exponentially more than he expected at over R2 million.

Peters registered a dispute and accordingly got a reference number. Talks however stalled when the City of Joburg required him to pay half the amount it considered to be outstanding and give an undertaking to pay the balance before it would attend to the dispute.

He just didn’t have the money to pay it.

He made a payment for the current accounts, but the city allocated the money towards the huge, disputed amount instead. “It went into the big, black hole,” Peters says.

City of Joburg recalculated the bill over an extended period and Ice for Africa was even deeper in debt.

Knowing that the disputed amounts would not be ring-fenced, Peters stopped paying the City of Joburg.

After several pre-termination notices employees of City Power and the Johannesburg Metropolitan Police Department (JMPD) arrived at the premises on November 22 last year in six vehicles. “There were 15 to 20 people,” Peters says.

According to that termination notice he owes more than R5 million.

After some tense interaction they removed the circuit breaker and cut three cables, each about 5cm in diameter. They even dug up the first metre or two of each cable outside the mini-substation and sawed that off with a hacksaw.

This was done despite a notice on the outside of the box indicating that there was an outstanding dispute on the account, Peters says.

Since then Peters has been running his business with a generator that costs him R12 000 per day for diesel alone. His production in what should have been peak season for an ice business is at 70% to 80% and his wastage is up from 2% to 3% to 35% to 40%.

He says Ice for Africa is two or three weeks away from closing down, which would leave his staff of 65 without jobs.

Specialised electrician and forensic investigator Eric Bott has analysed his metering and billing and is convinced that Ice for Africa does not owe the City of Joburg more than R500 000.

He says there are mistakes on the bill and some readings are estimated based on earlier, wrong readings. The recalculation was unlawfully done over a longer period than the six months the by-law permits, he says.

Attorney Len Dekker, who is an expert in municipal matters, says municipal customers are entitled by law to accurate accounts. He says Section 62 of the Municipal Systems Act provides for customers to declare billing disputes and suspends all credit control with regard to such disputed amounts.

He says the municipality has an obligation to resolve the dispute within a reasonable time. Customers should be allowed to continue paying current amounts while the dispute is under consideration.

Dekker says if Ice for Africa incurs damages due to non-compliance by the City of Joburg, it would be entitled to recover the cost through a civil lawsuit.

Following several letters to the City of Joburg, including Mayor Herman Mashaba, Bott met with city officials on Monday morning in an effort to resolve the matter.

Peters however doubts whether the officials will act in time to save his business.

The City of Joburg did not respond to questions from Moneyweb.

 

 

 

-Brought to you by Moneyweb

 

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