Transnet-owned buildings in Ekurhuleni in the dark after unpaid bills

Several Transnet-owned buildings in Ekurhuleni are already in the dark and more will be cut off the electricity grid as the state-owned company has failed to pay its municipal bills for some time.

Ekurhuleni spokesperson Zweli Dlamini said Transnet has a consolidated debt of R14 499 940.67, from multiple properties that are owned by the company throughout the city, and this includes developed and vacant land, the latter includes some with nominal value. “Accounts department has started disconnections,” he said.

Production halted

Transnet Property chief executive Kapei Phahlamohlaka said the company was not aware of the almost R15 million in ageing debt stated, but only an amount of R8.3 million “including the current charges of ageing that was issued by the city as at end of June 2024”.’

Some tenants in Transnet buildings have already had to halt production and one company sent about 100 workers home late last week after city officials cut off their power without notice. Legal correspondence between the tenant and landlord Transnet, seen by The Citizen, was sent to the state-owned company last Friday morning demanding restoration of electricity.

The company’s attorney confirmed that it had paid its power usage to Transnet every month. Phahlamohlaka said tenant billing was directly related to the lease agreement conditions agreed to by the tenant.

“These recoveries enable Transnet to ensure that all accounts are serviced monthly to avoid interruption of services,” he said.

“In instances where tenants are not keeping to their obligations to service the costs of the services rendered by the municipality through the Transnet infrastructure, Transnet Property will not compensate tenants.”

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Debt

Yet according to the metro, it’s Transnet that owes it the money. Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said that irrespective of the quantum, bills should have been paid.

“Transnet’s debt to its creditors, along with its high outstanding debtor challenges, is a symptom of poor leadership and mismanagement of its affairs,” he said.

“If Transnet says it only owes R8 million of the R15 million that Ekurhuleni believes is due, then Transnet should settle that R8 million without delay.”

Duvenage added there appeared to be high levels of poor debt collection across many government departments in the country, from municipalities at local government level, to national departments and state-owned enterprises.

“This I believe is due to a combination of poor systems management; a lack of discipline when it comes to debtors’ management and political interference.

Political deployees

While there are many good, competent and hardworking people in the public sector, we still have far too many inept politically deployed people in positions of authority that are ultimately responsible for the gross maladministration and financial mismanagement that we suffer from in South Africa today,” he said.

Ekurhuleni member of the mayoral committee for finance Jongizizwe Dlabathi, who replaced the EFF’s Dunga Nkululeko last month, is leading the city in a campaign to recover unpaid bills.

He said he planned to install effective debt management systems, ensure the restoration of revenue enhancement systems and create incentives for sustainable payments among other initiatives like curtailing revenue leakages and losses while improving the accuracy of billing.

Dlamini said: “The bottom line is that we need the money for infrastructure maintenance and extending services to communities that have been deprived in the past.”

Municipal bills

The city also confirmed other state-owned companies like South African Airways and Airports Company never fell behind in paying their municipal bills and utilities.

 A source at the Ekurhuleni accounts department questioned why Transnet Property was the odd one out. Phahlamohlaka in turn said they are talking.

“Transnet is continuously engaging with the relevant municipalities to ensure continuous supply of services to all its operations and tenants. “We will continue to engage with the municipality to eliminate the ageing debt.”

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