THE City of uMhlathuze wrote off bad debt totalling over R4.4-million on Tuesday as councillors expressed grave concern over the current management of debt collection.
With a total debt of R171-million as at 31 January, the highest transgressor was commercial debt sitting at R98.3-million followed by household debt (R53.5-million) and organs of State at R8.4-million.
According to an analysis of debt report which surfaced at the Executive Committee meeting on Tuesday, the top 15 debtors in Richards Bay owed Council a total of R24.9-million of which R20-million was outstanding for longer than 90 days.
The top business debtor was Basfour 3721 (Pty) Ltd sitting at R14.2-million with over R10 million sitting in the over 90 days’ category.
Other debtors included Tisand (Pty) Ltd at R2.5-million, Indiza Airport Company at R1.5-million and Kuhle Advertising at R1.4-million.
‘It is worrying and we note this report with concern. Who is collecting our debt? We need to be updated about the tracing agent,’ said Deputy Mayor Vera Gumbi.
City Speaker Mvuseni Mnqayi said while the City was among the best in terms of debt collection, they had to do more to collect business debt in particular.
‘Business is there to make profits and they must assist us by making payments,’ said Mnqayi.
Unemployment
Council also noted unemployment as a huge challenge with a large number of debtors emerging from traditional rural areas.
‘We are facing a big problem when it comes to collecting money from hostels in particular. How long will we carry this burden?’ asked Cllr M Mbokazi.
‘This is unacceptable. If we cannot collect the money as a municipality, then we need to source an agent. We cannot allow the hostel dwellers to get away with it and we cannot continue to write off debt,’ said Mbokazi.
However, City Mayor Elphas Mbatha said the problem was ‘with the municipality’.
‘The problem is with us and how we are managing it. We continue to carry debt. There must be a plan to address it,’ said Mbatha.
Arrangements
City Chief Financial Officer, Mxolisi Kunene said in terms of the top 15 business debtors, businesses had already made arrangements with the municipality to pay off debt while some were disputing the amounts.
‘Some matters have been handed over to Council’s attorneys. Summons has been issued in certain instances and cases are being defended.
‘This matter also involves issues of housing allocation. There is room for improvement,’ said Kunene.
