20 December, 2002

Press Release

City of Johannesburg clarifies the R2bn write-off

In his end of the year assessment statement last week, the Executive Mayor of the City of Johannesburg, Amos Masondo, said the City is running a R4bn deficit, which is part of the national deficit of R24bn by municipalities. The Mayor outlined the measures that the City is putting in place to correct its part of the deficit, like stepping up credit control to collect all the money owed to the City and the decision to write-off up to R2bn.

The write-off however has nothing to do with individual debt owed to the City, according to City Manager, Pascal Moloi. "This is only an accounting measure, and not debt-forgiveness, or some form of amnesty. The City intends to implement credit control on all outstanding accounts," he warned.

The write-off concerns non-recoverable debt only. According to Sendwe, the City will not hesitate to take legal action against outstanding accounts. "Customers must pay for the municipal services the City provides," Moloi says.

Credit control measures have had tremendous results for the City. Council figures show that cash collection increased to 94% in the month of October and 96% in November, up from the 87% average over the last six years.

How does credit control work? Sendwe Director of Revenue Collection Services says that once an account is in arrears, normal credit control practices will be enforced and this will invariably involve disconnection of services unless customers approach the City for payment. "No customer who is willing to pay, will be turned away and refused the opportunity to make arrangements with the City for payment of their account. Each case is evaluated on its own merit," says Sendwe.

The City says that arrangements must be credible and should offer a real possibility of reducing debt owing to the City. To this end, the City has changed its credit strategy to accommodate customers who wish to make arrangements on a month-to-month basis, according to Sendwe.

ENDS.

For more information contact:
Mbangwa Xaba
Media Liaison
Tel: 407 7226
Fax: 403 3494
082 467 9230