By: Nosipho Haya Komisa
Buffalo City Executive Metro Mayor Xola Pakati said plans are afoot to implement the credit control policy to recover over 4 billion rand debt owed to the municipality.
Pakati was briefing the media about the state of finances in the municipality at city hall this morning.
He said that the only solution to recover the debt owed to the municipality is to implement its credit control policy.
“Domestic households owe a combined R 3,1 billion, businesses owe a combined R1,3 billion, and the government owes a combined R 65,3 million. From government departments, the biggest debt is by Public Works which owes R30,3 million. We have therefore been left with no option but to fully implement our Credit Control Policy to recover the over R4 billion debt that it is owed,” said Pakati.
Pakati has urged all those that owe the municipality to come forward and make payments or arrangements. He further said that the municipality has already identified the biggest debtors and the process of issuing individual notices has started.
“The biggest debtors have been identified and the process of issuing individual notices has begun. The city is calling on the debtors to pay and avoid operating in the dark as this will have serious implications and loss of revenue. We also want to announce that the council has taken a resolution to offer our consumers a huge discount scheme that will offer massive incentives for those in debt. This offer allows those that are prepared to settle their accounts to get up to 50 percent discounts. There are also incentives for those who pay their current debt to be able to get into discount arrangements with the municipality. The details of this debt incentive scheme are available on our social media platforms and other relevant media platforms,” said Pakati.
He further said that even though the city’s finances have been negatively implicated by the Covid-19 pandemic and its lockdowns, the municipality is still able to pay staff salaries and meet its monthly obligations such as the bulk purchase of electricity from Eskom and water from Amatola Water Supply. The metro is also able to service its long and short debt hence it has constantly maintained an A credit rating from rating agencies. However, Pakati said the metro is currently experiencing cash flow challenges.
“After reviewing our revenue collection, we have had to have a go-slow in the implementation of some of our projects that are funded by the money that is received through the payment of services by residents, businesses, and the government. In the last financial year, our collection rate was 71 percent, and we need to have an average collection rate of around 80 percent or more if we are to better implement our projects,” said Pakati.
Pakati indicated that the basic infrastructure maintenance of the municipality has not been affected by its current financial woes or challenges.
City Executive Metro Mayor Xola Pakati said plans are afoot to implement the credit control policy to recover over 4 billion rand debt owed to the municipality.Pakati was briefing the media about the state of finances in the municipality at city hall this morning. He said that the only solution to recover the debt owed to the municipality is to implement its credit control policy. “Domestic households owe a combined R 3,1 billion, businesses owe a combined R1,3 billion, and the government owes a combined R 65,3 million. From government departments, the biggest debt is by Public Works which owes R30,3 million. We have therefore been left with no option but to fully implement our Credit Control Policy to recover the over R4 billion debt that it is owed,” said Pakati. Pakati has urged all those that owe the municipality to come forward and make payments or arrangements. He further said that the municipality has already identified the biggest debtors and the process of issuing individual notices has started. “The biggest debtors have been identified and the process of issuing individual notices has begun. The city is calling on the debtors to pay and avoid operating in the dark as this will have serious implications and loss of revenue. We also want to announce that the council has taken a resolution to offer our consumers a huge discount scheme that will offer massive incentives for those in debt. This offer allows those that are prepared to settle their accounts to get up to 50 percent discounts. There are also incentives for those who pay their current debt to be able to get into discount arrangements with the municipality. The details of this debt incentive scheme are available on our social media platforms and other relevant media platforms,” said Pakati.He further said that even though the city’s finances have been negatively implicated by the Covid-19 pandemic and its lockdowns, the municipality is still able to pay staff salaries and meet its monthly obligations such as the bulk purchase of electricity from Eskom and water from Amatola Water Supply. The metro is also able to service its long and short debt hence it has constantly maintained an A credit rating from rating agencies. However, Pakati said the metro is currently experiencing cash flow challenges.”After reviewing our revenue collection, we have had to have a go-slow in the implementation of some of our projects that are funded by the money that is received through the payment of services by residents, businesses, and the government. In the last financial year, our collection rate was 71 percent, and we need to have an average collection rate of around 80 percent or more if we are to better implement our projects,” said Pakati. Pakati indicated that the basic infrastructure maintenance of the municipality has not been affected by its current financial woes or challenges.