Two weeks ago the City of Joburg announced that it had gone out to raise a R750m loan from the International Finance Corporation (IFC) to fund upgrades of the metro's water reservoirs. In light of the announcement, Sowetan spoke to Joburg MMC of finance Margaret Arnolds about the city’s ongoing struggles with revenue collection and whether Johannesburg is broke.
Sowetan: How is the City of Johannesburg doing in terms of collecting revenue from residents?
Arnolds: The way we would want to collect – I can surely tell you we are collecting – but we are not collecting at the speed or in the way that we would want to. If we’re supposed to collect 87%, we’re only collecting 85%, the debt just keeps going up. That’s why we’re collaborating with various entities to reduce estimated meter readings and improve accuracy. A lot of clients and residents are complaining about billing issues, and we are in the process of dealing with them. We’ve launched Project Lokisa, which is focused on resolving customer queries, especially around estimation inaccuracies and we’re also working on new metering solutions to further address the estimation issue.
Sowetan: Where does the city's current debt book stand in revenue collection?
Arnolds: We’re standing at between R50bn and R63bn.
Sowetan: Will the city consider a formal debt relief programme?
Arnolds: We do have a debt relief programme in the works, but it must go through the council. For starters, we have the ESP programme (expanded social package), but many residents in informal settlements don’t qualify because they don’t have a registered address. Others get disqualified due to old credit information – like having had an [unpaid] Edgars or Truworths account 10 years ago. We’re reviewing this because people’s situations change. We’re also looking into a more structured debt write-off policy, but we want to make sure it doesn’t lead to defaults again. We’re working on a sustainable approach and it will go through council soon.
Sowetan: Is the City of Joburg broke?
Arnolds: No, I don’t think we’re broke. There’s a difference between being broke and needing to manage your budget smartly. We have written to the national government for assistance, but we are managing. The city will not crumble tomorrow. We’re also urging residents to play their part and pay for services. That includes all of us, councillors and executive members included, we are also residents.
Sowetan: What’s the status of the current budget and what can residents expect?
Arnolds: We did the adjustment budget, and now we’re in the process of finalising the draft budget, which currently sits at R87bn. We’re taking it out to the people, sharing proposed rates, electricity tariffs, and gathering input through integrated development plan meetings. The final budget will be voted on in May, but this process is all about hearing from the people.
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