Cape Town’s debt policy under fire: stricter rules or simple clean up?

The City of Cape Town is denying that it has changed its municipal debt policy.

Some residents claim the City is becoming more aggressive in its measures to recoup overdue monies from residents.

Officials insist the changes are administrative, not punitive, aimed at making the system easier to understand.

The City maintains it has simply consolidated indigent support and credit control measures.

ALSO READ: Large retailer takes 'convenience fee' on prepaid electricity, sparking outrage

"We did not bring in a new policy at all," says Alderman Siva Moodley.

Moodley says those whose accounts are overdue are given ample notification.

"If you do not pay your account, we have something like three SMSs that go out to residents to tell them you are in arrears, you haven't paid, and then we follow a process."

Moodley says deducting a percentage from prepaid electricity purchases to settle municipal accounts that are in arrears is a last resort.

He adds that once deductions are implemented, residents tend to take action.

"The moment that happens, we get a lot of calls coming back, because 50% of your (electricity purchase) goes towards your debt... and then we get our residents coming forward."

Moodley says the city offers more than 30 walk-in centres where residents can apply to have a payment scheme drawn up for accounts in arrears.

"We are saying come through and make an arrangement, we understand how people are struggling... we have a policy to help you. We look at your disposable income, and we say, ok, let's sign an agreement that you pay off this debt."

The City says it has a 97.3% collection rate and says strong revenue management is key to sustaining service delivery.

ALSO READ: Inner City Saturdays aims to bring Capetonians back to the CBD

To listen to Moodley in conversation with CapeTalk’s Lester Kiewit, use the audio player below: