Msunduzi Municipality's offer of 50% to businesses and households that default on their bills has been rejected.
Image: Independent Newspapers Archives
The Msunduzi Municipality’s gesture of leniency, offering service delivery payment defaulters a 50% discount on over R8 billion in debt, has been rejected by the city’s ratepayers and business associations.
The rejection came from the Msunduzi Association of Residents and Ratepayers (MARRC) and the Pietermaritzburg and Midlands Chamber of Business (PMCB).
The municipality issued a statement on May 28 announcing that, starting from May 1, businesses and households defaulting on payments would pay half their outstanding debts if they came forward to make payments.
This leniency would last until December 31.
During the budget speech, Mayor Mzimkhulu Thebolla had raised concern late last week that households and businesses owe the city R7.9 billion and R1.3 billion, respectively.
He then encouraged a culture of payment by announcing that defaulters would have until September 30 — a four-month window — to pay 50% of their debt upfront. Businesses would then settle the balance within three months after the first payment, while households would have six months to settle.
However, MARRC CEO Anthony Waldhausen rejected this offer, stating that it benefits those who constantly default.
He also said this would not help the city meet its required revenue collection target and would give residents and businesses an experience of unequal revenue collection.
“These programmes encourage people to default with the aim of getting discounts.
“These programmes are not financially sustainable and a comprehensive programme needs to be established that captures all who are not paying,” said Waldhausen.
He called for incentives for those who pay diligently and are up to date with their municipal accounts.
“We need to complement residents for contributing to the municipal revenue and perhaps provide a discount if one pays their account ahead of the due date. This is what is needed too.”
In the statement announcing the discount, the municipality said this initiative was a broader strategy to improve revenue collection, enhance cash flow, reduce long outstanding debt, and ensure the continued delivery of critical services.
“In terms of the approved campaign, qualifying residential, business, and other consumers may receive a 50% discount on qualifying arrear municipal debt, including services debt, property rates debt, interest, and penalties, subject to the terms and conditions approved by council.
“The campaign further allows qualifying consumers to enter into structured payment arrangements, creating an opportunity for financially distressed households and businesses to rehabilitate their municipal accounts while remaining committed to future payments,” read the statement.
It said the council adopted the initiative after it had been implemented in other municipalities across the country, yielding positive outcomes.
“Importantly, the campaign is not merely a debt relief initiative, but a strategic programme aimed at rebuilding a sustainable revenue base that will support service delivery, infrastructure maintenance, and long-term financial stability.
“Council also approved an extensive communication and marketing drive to ensure that residents, businesses, and all consumers are adequately informed about the campaign, application processes, qualifying criteria, and payment options,” the municipality said.
The city would, in the coming weeks, roll out a comprehensive public awareness campaign across various communication platforms and community engagements to encourage maximum payments.
“Consumers are encouraged to take advantage of this once-off opportunity to regularise their municipal accounts and partner with the municipality in building a financially sustainable and service delivery-oriented Msunduzi,” said the city.
The city has not yet responded when asked about the terms and conditions for benefiting from the discount.
Thebolla also announced that the municipality has written off more than R57 million worth of debt for 976 families classified as indigent, intending to write off up to R200 million of historical debt during this financial year.
PMCB CEO Melanie Veness does not think the discounts are appropriate, as “it is rewarding the behaviour that is unacceptable” while leaving those who pay aside.
“They pay 100% of their bills, and there are those who get away with not paying for a long period of time and are getting 50% discount.”
She said many defaulters could afford to pay.
“In my view, it is totally unacceptable because they offered this amnesty in the past, and the people who own the most valuable properties, who are habitual offenders, wait for this amnesty period to pay half, while the rest of us pay the full price all the time.”
Veness said she was aware of business owners who deliberately did not pay.
“In fact, they laugh about it, and I heard them. There may be some people who are unable to pay their bills; in most cases, if they get switched off, they make arrangements,” she said.
Veness said people who are honestly struggling to pay bills should approach the municipality for payment arrangements.
She said special indemnity could be arranged for businesses that have proof of battling to prevent them from closing down without paying what they owe the council.
“But if you can come up with the money in three months to pay in full, why haven't you been paying the whole time? Apart from the fact that the municipality can take legal actions, there are a lot of other opportunities for the municipality to recover the money.
“I want to know from the municipality how they accumulated the debts to this amount, as the people involved are filthy rich,” she said.