Durban owed R800m

State owned entities owe the eThekwini Municipality more than R800 million in unpaid rates

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Durban - State-owned entities owe the eThekwini Municipality more than R800 million in unpaid rates and the city was resorting to extraordinary measures such as attaching rental paid to the entities to recoup the money.

Among those being targeted is the Passenger Rail Agency of South Africa (Prasa) which owed the city R128m.

The city, in an effort to recoup the money, planned to attach the rental that clothing store, Mr Price, pays Prasa to lease premises at its Masabalala Yengwa (NMR) Avenue store.

This emerged on Thursday during a Finance and Procurement Committee meeting where officials told councillors that the city faced huge “challenges” in collecting rates from parastatals.

According to a report submitted to the committee, the Department of Water Affairs owed the city R17.5m, the Ingonyama Trust – which administers communal land on behalf of the Zulu nation – R108m while Transnet owed R588m.

Councillors from the DA wanted to know why the city had not disconnected the services to these entities in the same way it did for ordinary ratepayers.

City Treasurer, Krish Kumar said the city had planned to disconnect services to them and had in the past disconnected Prasa’s Durban Station.

“It however had major disruptions to commuters and the economy. We are now looking at neutral sites to disconnect which will not affect the public and the economy,” he said.

Kumar said the city was in discussion with the various entities about paying their debts and were working through the national Treasury.

Asked why the city did not take legal action against the entities, Kumar said they had to follow the “inter-governmental processes” first .

In addition to parastatals, government departments had also racked up huge unpaid rates debts with the city.

According to a report to the committee, government debt equated to R461m of which R149m was outstanding for more than 90 days.

Section 21 (non-profit) schools owed the municipality R46.5m, of which R21m was for more than 90 days.

Among the government departments that owed the municipality, the national Department of Public Works owed more than R21m, followed by the provincial department, which owed R204 000.

The report also found that 1 800 city employees owed the municipality R10m, while 17 councillors owed R43 383.

The report said a total of 26 928 customers had their electricity disconnected, with staff and councillors among them. One hundred and five customers were “red-lined” with the credit bureau, and 38 matters were taken to court.

Furthermore, R282 599 was deducted from city employees’ salaries to pay outstanding debt.

Daily News