The front façade of a building flanked by trees The Durban City Hall serves as the seat of local government, the eThekwini Municipality. Picture: Leon Lestrade Independent Newspapers
EThekwini Municipality is grappling with a staggering consumer debt crisis, with the debt now standing at R34 billion despite interventions made including offering indebted customers the option to participate in debt relief programmes.
Recent documents reveal that municipal debt has risen by R7.3 billion between September last year and September 2024.
The figures are contained in the City's debt collection report for September, which was tabled at a meeting of the executive committee recently.
Opposition parties have challenged the municipality to focus on collecting this amount, saying this would make the City “wealthy” and be able to finance all its operations without needing to borrow.
In July 2024, The Mercury reported that the municipality was owed R32 billion.
The latest report presented to the executive committee last week noted that “the municipality’s debt is steadily growing at an average of 3% per month, including interest.” As of September 2024, the total debtors, including current charges, amounted to R34.6 billion.
The report further highlighted that “the debtors' book grew significantly by R7.3 billion from September 2023, mainly due to high backdated charges, including the 6kl back charge.”
It said the continuing increase in debtors can be attributed to several factors, including:
It said it is noted that water constitutes 39% of the total debt, while property rates and electricity account for 26% and 14%, respectively. The report indicates that residential debt contributed the highest percentage of debtors, at 72% of the total debt.
“The high household debt shows that there are a significant number of households struggling to pay their municipal bills,” the report said.
The report also revealed that the municipality still faces collection challenges with regard to the Ingonyama Trust and the Department of Education (DoE).
The Ingonyama Trust is said to owe about R266 million, with the entity committing to pay R19.8 million. However, R166 million is disputed by the traditional council, and about R51.2 million will be paid by Hammarsdale Junction Mall, subject to the submission of leases.
Regarding the Department of Education, there is an outstanding debt of R215 million from section 21 schools.
“After protracted engagement with the DoE, we finally agreed on a payment plan,” the report stated.
While the department has started paying, it has been late and required constant reminders to fulfil its obligations.
City councillors described the municipal debt as a “serious challenge”.
DA councillor Thabani Mthethwa expressed concern, stating that the DA has always been critical of the lack of vigorous efforts to collect debt, especially since it seemed the municipality is quick to disconnect residential consumers compared to government departments and parastatals.
“We call on eThekwini to do more to collect revenue instead of relying on borrowing every year, which overburdens consumers,” he said.
IFP councillor and chairperson of the Trading Services Cluster, Mdu Nkosi, also voiced concern about the municipality continuing to be owed the debt, particularly by national and provincial government departments.
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