Pretoria - The Gauteng High Court, Pretoria, yesterday granted the City of Tshwane permission to attach Madibeng Municipality’s bank account to recoup R258 million owed to it for bulk water.
The City has been on an intense mission to curb the culture of non-payment among its clients, as it negatively affected its capacity to deliver services to its residents and to pay its own suppliers like Eskom, that recently embarrassed the City by turning down its proposed payment plan and forcing the municipality to settle an outstanding R876 million bill for June.
The North West municipality entered into payment arrangement in terms of which the Madibeng Municipality would settle its account in instalments over a specific payment period, but it failed to honour its commitment.
At the time the agreement was entered into, Madibeng’s debt stood at R243 million. Tshwane was then forced to restrict the municipality’s water by 50%.
Tshwane buys bulk water from Rand Water and provides it to Madibeng and other municipalities, and they are expected to pay their accounts at the end of each month.
However, after trying on numerous occasions to persuade Madibeng to make payments, Tshwane felt its efforts seemed to have fallen on deaf ears and took legal action. On Monday it filed an application to attach the account.
Executive mayor Randall Williams said the City welcomed the court judgment because the attachment of Madibeng Municipality’s bank account will enable the City to recoup the funds owed to it, and this would assist the City to pay its own creditors.
“Madibeng Local Municipality now owes the City R258 million for its unpaid bulk water account. At the time the agreement was entered into, Madibeng Local Municipality’s debt stood at R243 million.
“The City’s court application was aimed at enforcing the settlement of Madibeng Local Municipality’s debt by attaching its bank account. The Madibeng Municipality has continuously failed to attend to its payment obligations and the City is taking a zero tolerance approach towards outstanding debtors.”
Madibeng Municipality spokesperson Tumelo Tshabalala said leaders of the municipality were about to have an urgent meeting to discuss the matter when the Pretoria News called.
He said official comment on the specific action to be taken would be communicated once the meeting was done.
The City of Tshwane has recently also taken serious action against other prominent clients that failed to honour their payment arrangements, including the Passenger Rail Agency in Hatfield, which owed the City R11.9 million.
Pretoria News