ETHEKWINI Municipality has revealed that the properties where two N2 Shell Ultra City filling stations operate in Umgababa owe it a total of R33.9m for unpaid rates and interest.

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The municipality has since referred the matter to its legal department for the declaratory order to establish who is liable to cough up the payment. This comes after Ingonyama Trust and the Umnini Trust Traditional Authority, through the Umnini Community Trust, both indicated they are not liable for the debt.

Both Shell garages and some fast-food businesses operate on tribal land that falls under the Zulu king through the Ingonyama Trust, but is administered by the Umnini Trust Traditional Authority, which was headed by the recently deceased Inkosi (chief) Phathisizwe Luthuli. Ingonyama Trust said the debt is the responsibility of the Umnini Trust Traditional Authority, as it administers the land directly.

The matter was tabled in a debt collection report during a February council meeting. As of January 31, the eThekwini debtors’ book stood at over R43.4b. Of that amount, Ingonyama Trust owes over R328m for rates on its various properties within the municipality. In the council meeting’s minutes, it is noted that R196.8m of that amount, ownership and liability for rates on those properties is under dispute.

When contacted, Sipho Msimango, the secretary of Umnini Community Trust, was surprised by the news of the large debt, saying he knew nothing of any money owed for rates.

“We pay eThekwini for the electricity and water usage every month. What else are we supposed to pay for?” asked Msimango.

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Shell Downstream South Africa’s spokesperson, Pam Ntaka, confirmed that the company is a tenant at Umgababa Shell Ultra City, operating on land owned by the Umnini Community Trust.

“In line with the contractual obligations governing the landlord–tenant relationship, the responsibility for the payment of municipal rates rests with the landowner. Accordingly, the Umnini Community Trust is responsible for settling any municipal rates directly with the eThekwini Municipality. The franchisee (retailer) operating the service station is responsible for municipal utilities consumed at the site, such as water and electricity. We confirm that the respective retailers are paying the relevant municipal service providers directly for these utilities,” said Ntaka.

Another tenant, Steffen Dirkze-van Schalkwyk, confirmed that his company’s lease agreement is with Shell Downstream South Africa. In terms of this lease, the responsibility for municipal rates does not fall on them as the tenant, but they do pay for the water and the electricity they use.

eThekwini said it was forging ahead with the legal route.

“A letter has been drafted by our legal department regarding these properties in the anticipation of applying to the law courts of a declaratory order regarding this debt,” read the minutes.

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