The City of Tshwane's cash flow situation may be in dire straits with the metro being owed at least R23.3 billion by defaulting customers, but all is not lost.
This was the sentiment expressed on Monday by mayor Cilliers Brink, who announced bold plans to turn around the metro's fortunes during a media briefing at Tshwane House.
He said the municipality wanted to increase revenue and reduce expenditure in the range of R1bn a month in the next six months.
“What we have to our advantage is a R23.3bn debtors’ book that we aim to turn into cash. If a quarter of this debtor’s book is collectable, it is collectable in the next six months. If we succeed, we improve our cash-flow, our Eskom account as well as our credibility and creditworthiness,” he said.
The City’s Eskom debt has shot up from R1.1bn in September last year to almost R3.9bn at the end of January.
Brink emphasised that the City was on a financial rescue mission, which focused on addressing problems stemming from bulk purchases from Eskom and Rand Water, the tariffs and property rates, metering of consumption, billing based on metering as well as credit control and debt collection.
He said too few consumers are being metered due to defective meters and illegal connections.
“Of those whose consumption is being metered, too few receive accurate bills or have their disputes resolved in time. Of the total who are being billed, too few actually pay their bills, because our credit control and debt collection system is ineffective,” he said.
Brink said the City believed it would save significantly on bulk purchases and expenses if Rooiwal power station is brought online and a deal is concluded with a private operator.
“We hope that this saving will be realised during the course of 2025, but it is contingent upon many things that still need to happen. Our immediate efforts are more conservative.
“We aim to reduce the interest accrued on our outstanding Eskom debt by implementing the other aspects of our financial recovery plan and managing down our Eskom debt,” he said.
The City, he said, has a major problem with illegal connections and meter tampering.
“A new Tshwane Metro Police Department unit is being established to help us with focused attacks on illegal connections,” he said.
He said in the budget for the new financial year that starts on July 1, 2024, the City will ensure that these tariffs are as cost reflective as possible.
“On metering, the mayoral committee has approved the roll-out of as many smart, prepaid electricity meters as possible,” he said.
On billing, he said, the City was allocating additional resources to ensure that data was correct and that billing disputes were dealt with effectively.
“We will also make sure that everyone gets a bill, if not online, then on their phones. We can no longer count on the Post Office, nor require residents to visit municipal offices once a month. We must use technology,” he said.
The City’s aggressive revenue-collection campaign called Tshwane Ya Tima would continue to be used as a tool for sharpening up credit control and debt collection.
Brink said: “The Tshwane Ya Tima campaign that was rolled out in 2022 was very effective. We wanted Tshwane Ya Tima to become a standard operating procedure for the City, but our efforts were undermined by the strike.”
The campaign, he said, would be rolled out with even more intensity than in the past.
“We will update our credit control and debt collection toolbox, including issuing summons and taking properties in execution of judgement debt. Our focus will be on the top 1 000 consumers, but as we work through this backlog we will also become stricter on other consumers,” he said.
Pretoria News