Bad debts threaten city
‘If government accounts are not settled, we will have to resort to cutting them off’
BAD debts are causing significant negative impact on the City of uMhlathuze’s cash flow and must be urgently addressed.
The matter was debated during the financial reporting item at Tuesday’s executive committee, where city mayor Mdu Mhlongo pulled no punches in demanding solutions.
Debtors age analysis showed that while 64.61% (R313.4-million) are in the 0-30 days category, 31.46% (R152.6-million) are over 90 days.
These are dominated by government and business non-payers.
Top ten city arrear accounts are:
• Tata Steel KZN (Pty) Ltd – R56 679 327.75
• Basfour 3721 (Pty) Ltd – R20 631 109.88
• Zotec Development (Pty) Ltd – R4 012 399.67
• Tisand (Pty) Ltd – R3 878 570.02
• Tata Steel KZN (Pty) Ltd – R2 661 593.68
• River Rock Invest (Pty) Ltd – R 1 787 081.35
• River Rock Invest (Pty) Ltd – R1 430 273.33
• Panda Petroleums – R2 079 386.38
• Shifting Sands Property Investments – R1 078 483.65
• PSE Development (Pty) Ltd – R629 098.63
No excuse
Government debtors add heavily to the cash flow problems, with a combined R3 599 173.69 owed to the city.
The Department of Public Works (PWD) is the chief offender, owing R1.85-million on various properties.
‘It is difficult to understand the government account issue,’ said mayor Mhlongo.
‘It’s not as though there is no government money. Someone is not doing their work.
‘We need to keep up the pressure on them because it poses a huge risk to our cash flow.
‘Cogta leadership is also furious about the delays.
‘It we could recover all the money owed, our situation will change dramatically and we can improve service delivery.’
City chief financial officer Mxolisi Kunene said the PWD has appointed a service provider to gather information with a view to accelerating payment.
‘If government accounts are not settled, we will have to resort to cutting them off,’ said Kunene.
Collection of rural debt is also proving troublesome, with difficulty in implementing credit controls and restricting users.
Mhlongo urged ward councillors to use their influence to encourage a culture of payment among communities.
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