Ekurhuleni Metro is playing with residents’ money – DA
The Ekurhuleni Metro does not enforce debt collection equally across the metro.
This is according to local ward councillor Bruce Reid, who is also a member of the Finance Oversight Committee.
“Some residents have their electricity cut off if they are R100 in arrears, while other residents’ accounts are only cut off when they reaches well over R200 000,” said Reid.
“By waiting for an account to reach such high amounts before cutting it off, the metro is putting severe pressure on residents, as they will never be able to pay off their debt.
“The maximum debt repayment period is 36 months (three years), which would make the instalment without interest at R5 555.55 per month if a resident has debt of R200 000.
“What the metro fails to take into account, is that the accounts go unpaid and become overdue mainly because many residents in Ekurhuleni struggle financially.
“Unpaid accounts are handed over to debt collectors to collect on behalf of the metro and arrears amounts are transferred to a separate account when handed over to debt collectors, where repayment plans are negotiated.”
Reid said debt collectors charge a fee for collections and this is deducted from the instalments paid by the resident.
“The instalments are, in most cases, not adequate to cover the combined debt repayments and debt collector’s fees, resulting in the outstanding amounts not being repaid over the agreed upon term.
“The debt collectors have three-year contracts with the metro and when this contract expires – as it did in June 2015 – the debts are written back from the debt collectors to the metro.
“This occurs without notification to the residents, but with hugely inconvenient consequences.
“The amounts that were with the debt collectors are now written back to the resident’s account in July. This means that the bill – which has been with the metro for anything between one and three years, will now be invoiced for payment during the month of July.
“When residents then fail to make these payments, their account goes into arrears in August.”
Reid said the metro then cuts off the resident’s electricity supply, without informing them of what has transpired between the metro and the debt collector and the many account transactions thereafter.
“The residents will, therefore, also continue to pay the agreed instalments, as they are not aware of the developments.
“The travesty of it all is that the metro knows that the debt collector’s contract expires in June, however time and again it fails to appoint the new debt collectors in time to ensure continuity.
“The harsh punitive measures applied to the resident’s account when trying to secure re-connection, such as a 30 per cent down payment on outstanding accounts before re-connection – is unjust, unfair and not achievable.
“At the end of June 2015, the Ekurhuleni Metro was owed around R12-b in outstanding debts, of which almost R9-b was the results of overdue and unpaid accounts.
“The metro has provided for this debt as bad debt. Surely almost R9-b could be better used to improve the lives of residents if only it had been collected.
“This proves that the metro does not have an effective debt collection policy, despite this problem being around for years.
“It is unacceptable that the metro does not have an effective debt collection policy and that the metro allowed this problem to amplify on an annual basis to its current unmanageable state.”
