Metro overdue consumer debts increase by R189 204 in July

SEPTEMBER 10, 2014

Overdue consumer debt in Nelson Mandela Bay increased by R189 204 in July to stand at R1.97 billion, according to a report to be submitted to the Budget and Treasury Committee.

Of the total debt, R1 138 billion has been outstanding for over a year; and R379.8 million for between 181 days and one year. The bulk of the overdue debt is owed by households.

The report shows that the collection rate in July was 98.96%, which is substantially above the target of 94% set in the metro’s Integrated Development Plan and compares favourably with the 93.71% recorded in June.

The report points out that the 98.96% collection rate was achieved despite the fact that 14 high energy users are with-holding a portion of their payment.

The 14 high-energy users have been paying only 76.5% of their electricity consumption since July 1, 2013 as a result of a dispute over the electricity tariff increase.

The report shows that as at July 31 this year, the 14 companies concerned owed the metro a combined R157.7 million. The matter is currently before the High Court.

The report notes that it is “considered imperative” that the metro maintains at least the budgeted collection rate of 94% “in order to ensure service delivery aligned to the 2014/15 Budget”.

With regard to strategies being pursued to “achieve and maintain a sound financial position,” the report states that the Human Settlements Directorate has been asked to submit to the committee an updated report on the disposal of serviced land. This report must include a cost/benefit analysis if the available serviced land is not sold.

The report also notes that the cost coverage ratio, excluding unspent conditional grants, requires “close monitoring, scrutiny and improvement as the available investments only cover 1.66 months of operating expenses.

“In this regard the 2014/15 Budget has been based on a cost coverage of two months while National Treasury expects municipalities to move to three months over the medium term.”

The report indicates that the creditor’s payment rate in July was 29 days against a target of 30 days. This is an improvement on the 31 days recorded in June this year. - metrominutes

 

CAPTION: Port Elizabeth town hall. IMAGE sourced from www.panoramio.com