Cape Town’s residents owe the City more than R9.887billion in unpaid rates and services bills, which is severely hampering service delivery from the municipality.
A report prepared by the City’s finance directorate for the finance portfolio committee indicated that it was owed R7.846bn by households, R1.513bn by businesses and other outstanding debts totaling nearly R500million.
“The water crisis had a huge impact on the collection ratio and the City’s debt, which increased significantly since the punitive tariffs were implemented,” the report read.
The department reported that it could not yet write off the R1.466bn owed the City by indigent households because the department of water and sanitation had not yet repaired water leaks, nor installed water management devices or prepaid electricity meters.
An amount of R7.145bn in arrears owed to the City as at the end of January this year, was more than R295m higher than in December 2018, because of an increase in debt owed over 120 days or more.
There was also an amount of R330m in irrecoverable debt owed by indigent properties, which had also not yet been written off for the July 2018-January 2019 review period.
The report highlighted that despite the debt, the City still managed to recover a large percentage of its rates, with a 92.57% payment rate.
Mayoral committee member for finance Ian Neilson said: “Due to this debt, the City has to make a provision for bad debt in its budget, which means that fewer services are delivered.”
Neilson said Mayco planned on enforcing payment of outstanding debts through effective debt management actions, especially against those, who can pay, but choose not to pay and the frequent defaulters.
During the month of January, 14 203 letters of demand were sent out and 607 debtors were listed for adverse credit listing.