city of Cape Townâs power supply failure
9 June 2006
In response to the city's media statement by Councillor Ian Neilson, Mayoral
Committee Member responsible for Finance and Lionel Roelf, Mayoral Committee
Member for Trading Services, herewith a factual explanation of the state of
affairs.
The city's claimed "outstanding and undisputed" amount of R724 000 in
respect of 27 Wale Street consists of R613 734 for rates (property taxes) and
services (other than electricity) and R110 277 for electricity.
However, the correct position is as follows:
The electricity account (Number 115035897): R110 277,29
The city's invoice for electricity in respect of 27 Wale Street, is
currently still being delivered to Samstocks Portfolio Properties care of RMB
Properties (Pty) Ltd, although the property was transferred to the Western Cape
Provincial Government two years ago. This in spite of the fact that the city
was formally informed as early as 27 August 2004 of the transfer and that all
future accounts in relation to 27 Wale Street must be forwarded to the
Department of Transport and Public Works, Private Bag X9160, Cape Town.
Notwithstanding this notice, the electricity account is still being delivered
to Samstocks Portfolio Properties. This reflects that the city's billing
systems are not up to date to render an effective customer care service.
What's worse is that the R110 277,29 is made up as follows:
* arrears due immediately of R27 842,29 representing accumulated interest that
arose from incorrect mailing by the city (post transfer period of 27 Wale
Street). Although an application was made to the city for writing off the
interest (being a slip up on their part) no response has been received to date.
Nevertheless, in the spirit of good inter-governance relationships and in the
interest of our personnel, the interest will be paid with the intention to
negotiate write off and a refund afterwards.
*·The remainder R82 435,00 is only due by 23 June 2006 and will be paid
then.
The rates, taxes and services (excl electricity) account (number 203520750):
R617 755,56
The claimed R617 755,56 is made up as follows:
*·ostensible arrears of R577 016,37:
- in respect of services rendered to the provincial government for water (R111
990,91); sewerage (R87 685,01) and refuse (R25 197,52), totalling R224
873,44.
- in respect of services rendered to the national government (Public Works) for
property rates (R266 853,78) and city improvement district levy (R122 006,98)
totalling R388 860,76.
- an un-reconciled and unexplained amount of R4 021,36
- the remainder, R40 739,19 which is current is only due by 12 June 2006 and
will be paid when due. However, R27 429,33 of this amount is in respect of
property rates again due by the national Department of Public Works.
Therefore in respect of this account the following will be paid by the
province immediately, as this is the only amount due to the city i.e arrears
totalling R224 873,44 the unexplained / un-reconciled amount of R4 021,36 and
the current services account due by the Province of R13 309.86, coming to
R242 204,66.
In summary therefore, in respect of the R724 000 claim by the city
legitimately only R270 046,95 is due and has already been paid today.
Notwithstanding the payment of the above amount the provincial government is
in credit with R519 000 on more than 12 properties that have either been
wrongly allocated or not allocated at all. Ironically, the city is not prepared
to reallocate or shift this money.
Common problems identified by the provincial government in the city's
billing system include:
* invoices send to the wrong client and address
* unwillingness from the city to split the accounts between property rates
(which are the responsibility of the national Department of Public Works) and
service charges (which are the responsibility of the province)
* unexplained opening balances on accounts due to amalgamation of the seven
administrations and the migration to the SAP accounting system
* misallocations or non-allocations resulting in huge amounts sitting in
suspense accounts of city
* unwillingness of the city to consider write off of interest that has
accumulated on some accounts.
To address some of these problems the province initiated a working group as
long ago as last year to pay specific attention to "outstanding debt claims" by
the city, as well as to administrative issues. The provincial government is
committed to settle any "outstanding debt" due, provided this can be
substantiated by the city. Through the endeavours of the working group much of
the claimed debt has either been settled or referred to the correct
address.
Enquiries:
Harry Malila
Cell: 082 855 5553
Issued by: Department of Finance and Tourism, Western Cape Provincial
Government
9 June 2006
