According to Business Day the City of Johannesburg lost over R1bn in under collected revenue during the South African national lockdown. Subsequently, the city has announced that they will be resuming with credit control measures and start cutting water and electricity for consumers that do not pay their bills on time or do not make arrangements to clear their arrears.
The global lockdown was an unprecedented time for us all, causing massive economic devastation. It is for this very reason that the City of Johannesburg decided to temporarily postpone credit control measures in an effort to help to alleviate the economic burden and curb the spread of Covid19. These measures are however not sustainable over the long term and consequently, the city has resumed its credit control measures as of Monday, 24 August 2020.
The decision to reinstate credit control measures came with the relaxation of Covid-19 National Lockdown regulations to allow municipalities to resume full credit control measures on outstanding municipal accounts in an effort to boost revenue and recover lost revenue collection to ensure the sustainability of this crucial service delivery.
Credit control and payment plans affected by the lockdown
Given the circumstances brought about by the lockdown, the city would rather have ratepayers enter into payment plans then simply cutting off services. Since the beginning of the lockdown, the City has been affording ratepayers relaxed payment terms to assist customers in financial distress to settle their debt in full or pay their outstanding debt over a longer period. The following are some of the terms available to all ratepayers (Joburg media):
- The City will waiver 100% of interest previously charged should the customer choose to settle their account in full.
- The City will offer a reduced payment requirement when entering a payment arrangement with only 10% required. Customers will also not be subjected to affordability checks. This offer was valid until 30 September 2020.
The City appeals to municipal account holders not to ignore pre-termination notices issued because of overdue accounts, but to rather take advantage of the credit control assistance being offered to avoid being cut off municipal services.
The municipal services cut-off will resume within a credit control legal framework that includes the issuing of a pre-termination notice that will be followed up with a disconnection notice and subsequently a cut-off for outstanding accounts without payment arrangements.
All ratepayers in arrears are therefore requested to contact the City immediately should they have already received such notices to avoid being cut-off and further penalties.
During the lockdown there were no municipal agents assigned to residents’ properties to disconnect the water or electricity supply. Cunning criminals took advantage of the pandemic crisis and would arrive at a property claiming to be either Johannesburg water or City power officials and assigned to cut off services during the lockdown, then request a bribe to not disconnect them.
City of Johannesburg tariff hikes (IOL)
For the 2020/2021 budget period, the City tabled and approved tariff increases as of 14 July 2020. These tariff increases were however reduced from those initially proposed to lesson the impact of the Covid-19 pandemic and lockdown on residents.
The decision was made to reduce the initially proposed property rate from 4.9% to 4%, while the water tariff dropped from a proposed 8.6% to 6.6% and the proposed 8.10% increase for electricity was reduced to 6.23%. The City also decided not to go ahead with the proposed fixed charges of R200 for residential pre-paid electricity and R400 for commercial.
At Consolidated African Technologies we believe that for a society to function properly, it requires truly functional services. Reliable utilities support the growth of business, expansion in product and service delivery, job creation, and a better life for society at large.
Unfortunately without proper support services, pre-emptive maintenance, the ability to protect infrastructure from the additional load of illegal connections, and finally the ability to keep rates in check by ensuring that everyone brings their part, it makes it really hard to do so.
Consolidated African Technologies provides a range of job tracking and maintenance event data tools as well as solutions to effectively manage credit control processes and the associated need for meter and site audits. These solutions enable the proper tracking of events and legal execution of the process helping to minimize bribery and corruption and undue victimization of residents by ensuring that the correct process and procedures are followed as set out in the city’s own credit control policy.