City of Jozi cracks the whip to collect R48 billion in owed debts

The City of Joburg chief financial officer has warned that what the country is experiencing with Eskom will seem like a walk in the park compared to what Johannesburg residents will experience if the government, businesses and residents continue to default on what is owed to the city.

In a wide-ranging interview with The Citizen, Johannesburg group CFO Tebogo Moraka outlined plans to collect the R48 billion he claimed the city was owed.

One of those steps was the controversial roadblock plan. City officials last Saturday joined the Johannesburg Metro Police Department (JMPD) at a roadblock on Jan Smuts Avenue to target people in arrears to the municipality.

Moraka said because JMPD already interacted with motorists in roadblocks, the city could piggyback off them.

READ: JMPD’s debt-check roadblocks under legal scrutiny

“Our thinking was, at any roadblocks – after the JMPD finishes their business – we can offer you the full bouquet of our services, whether it be a query, resolution, acknowledgment of debt (AOD), registering you on e-Joburg, or changing your contact details. You can do it there,” he said.

“According to the law, we can’t force you to pay at a roadblock; we won’t arrest you at a roadblock. I know this has been the word going around, especially from the nongovernmental organisations (NGOs) and other political parties.”

He said the city had managed to recoup more than R100 000 owed to it during the roadblock.

“If you ask any of those people who went through that roadblock, no-one was forced to pay, no-one was arrested.

“Seven hundred and fifty cars went through that roadblock. From that, 125 motorists updated their contact details, signed AODs or settled their bills,” he said.

Moraka said the Gauteng provincial government owed the city about R1.5 billion for water, rates and electricity.

The city’s MMC for finance Dada Morero had met Gauteng finance MEC Jacob Mamabolo to engage on how the money would be paid and there was positive feedback.

He said the biggest debt was from the department of health with Charlotte Maxeke Hospital owing the city more than R200 million for water.

He claimed the city was almost at the point where it would sign an acknowledgment of debt with the department.

“They will pay a certain amount up front and they will pay off the debt over time.”

Moraka said if departments continued to default on their debts, they would follow normal credit procedures and the city would not be giving them any favours.

Various Gauteng departments had signed AODs since June, however if the city’s debt was still not paid by the end of September their services would be cut off.

“It would be difficult to switch off the water in the hospital because there are patients there, but if we have to switch off the head office for the department of health, we will do that.

“We would not want to be reckless and put people’s lives in danger; we are still the government, and we understand our people still need services.”

Moraka said the South African Local Government Association and National Treasury were helping at a national level to recoup money owed to the municipality.

He said the national departments and state-owned companies owed the city close to R2 billion – Eskom owed R500 million.

“It’s a funny thing that we buy electricity from them but Eskom owes us just over half a billion rands. We can’t switch them off because they supply the electricity, but the engagement was to say let’s sort out this debt,” he said.

Moraka said he had proposed to Eskom that the municipality be given electricity worth the amount owed.

“We pay them on time every month and it can’t be a situation where we pay them on time every month but they still owe us this money.

“We had discussions a few weeks ago and they have committed to coming back to me.”

Soweto, Cosmo City and Alexandra residents would also not be spared. These were some of the areas known to simply refuse to pay for services.

“[We have engaged] communities like Soweto, Cosmo City, and Alexandra to explain the need for residents to pay,” he said.

“People are saying we are targeting affluent areas and are leaving townships, [but] we are going for all areas that owe us money – Soweto in particular, because the bulk of our water goes there.

“It cannot be that we say, let’s go to Midrand, for example, and we leave Soweto.”

He said if the municipality could not collect the money owed to it, the problems facing the city would only get worse.

“We need to invest significant money in water, particularly, and power infrastructure.

“What we are seeing at Eskom – I know there was state capture – but the infrastructure is starting to collapse now. They are old and we would want [to prevent] a similar situation where we have substations collapsing,” he said.

“We have seen what is happening in Hammanskraal, where the wastewater treatment plant is breaking down.

“If we are not investing, at some point we will have a similar situation with water like in Tshwane where our waste treatment plants are breaking down.

“If we do not replace the infrastructure and upgrade, the [power] outages, where you go off even if it’s not load shedding simply because the substation is old, [will get worse].

“We do not have the spare parts and we can’t buy them because [as it stands] they are not affordable,” Moraka said.

“Residents not paying, businesses and government not paying, it impacts local government significantly because we are then in a position where we cannot invest in [what we need to].”