Cape residents owe City R4.2bn
Cape Town - Capetonians owe the city a staggering R4.2 billion in outstanding rates and taxes, and now the city is planning to get tough.
R9 million is owed by city councillors and staff. One councillor has owed R23 245 since October 31.
Trevor Blake, the city’s director of revenue, said the city was looking at ways of getting the debts paid, such as using electricity payments to pay off debt. This meant people in arrears who bought R100 of electricity would find R80 had gone into their arrears and just R20 was buying power.
“Alarm bells are starting to ring, we need to increase debt management action. Outstanding debt is going up. Because it’s summer, people are using more electricity and water.”
He was speaking at the utility services portfolio committee meeting on Monday.
Blake said R1.9bn of the total amount was debt from poorer areas and would be written off, along with R472m in interest.
The city was now looking at ways to get people to pay up the remaining amount.
“If you don’t make arrangements to pay off your debt you won’t be able to buy electricity... making it very inconvenient,” Blake said.
He said this would not happen to people who had made arrangements to repay arrears.
Many people owed thousands because of water leaks, and this problem was going to be tackled.
“Some people living in poorer areas owe R100 000 to R200 000 due to water leaks.
Once we repair water leaks on each property and install water managing devices and prepaid electricity devices, only then will these arrears be written off.
“The bulk of debt is water debt.”
Councillor Nas Abrahams said the plan was unfair because only those purchasing electricity from the city would be affected - many people, particularly in the northern areas, buy their electricity direct from Eskom.
Councillor Andre Fourie said it was worrying that the city found itself in this fix.” Blocking off prepaid electricity is a small fraction of the amount. The city must stop increasing rates and taxes, people can’t afford to live in Cape Town anymore. Unless the city does a drastic review, this amount will be R6.6bn by the end of the year.”
Last October, 4 462 electricity and 6 510 water warning letters were delivered.