The Emfuleni Local Municipality (ELM) Council is expected to vote this week on whether the cash-strapped local authority will write off debt – with an estimated R9 billion owed it by account-holders – to encourage  payment by businesses and residents .

ELM is caught financially between a deeply-entrenched culture of non-payment and systematic electricity and water theft, as well as  its own mammoth debt of billions to especially its own bulk suppliers Eskom and Rand Water.

The proposed write-off – envisaged starting with a 50% discount on amounts owed ELM – is not primarily aimed at non-payers per se but at under-payers struggling to meet their monthly bills but who do pay something.

Many businesses and residents were struggling to pay their bills to the municipality and these were the primary target for write-offs – but only if they were able to pay their current accounts, said ELM sources.

ELM is itself on the National Treasury debt relief programme for its estimated R7 billion debt to Eskom and is also on the verge of launching a Special Purpose Vehicle to deal with its debt to Rand Water and manage revenue.

Eskom and ELM also recently signed an agency agreement whereby the bulk utility will manage municipal electricity infrastructure and revenue, paying over ELM’s share.

ELM sources said the scheme was not aimed at non-payers and utility thieves who did not want to pay anyway for water and electricity.

Formally, the debt-write-off proposal reads as follows:

“Request for approval by Council for debt write-off for municipal customers with intention to improve collection and the rehabilitation of defaulting debtors.”

ELM has also accelerated its smart meter installation campaign to produce greater and more reliable revenue streams and to combat smart meter bypassing.