Government owes Gauteng metros millions in unpaid rates


Government owes Gauteng metros millions in unpaid rates

Amounts dating back a year are still outstanding to Tshwane, Ekurhuleni and Joburg, and the situation is 'catastrophic'


The Gauteng provincial government and some national departments owe three of its metros more than R600m in unpaid rates and services – and some of the debt has been outstanding for more than a year.
Tshwane alone is owed more than R310m, while the City of Joburg is owed R200m and Ekurhuleni nearly R90m.
Economist Thabi Leoka described the situation as catastrophic, saying it will affect the metros’ ability to provide communities with services.
“The non-payment of these rates will have a ripple effect on the ability of the metros to maintain their roads, water and electricity infrastructure.
“This will stifle the metros’ programmes. It will affect service delivery. If it was up to me, I would beef up municipal government instead of having a bloated national and provincial government,” Leoka said.
Gauteng provincial spokesperson Thabo Masebe denied the provincial government owed any of its municipalities, saying there were no "historic debts".
“We do not have any historic debts with any of our municipalities where the provincial government has an account. A team consisting of provincial treasury and infrastructure development is in place to ensure we are servicing our accounts. In the past we had issues of wrongful billing, but that was resolved. We don’t have historical debt,” Masebe said.
However, Gauteng department of infrastructure development spokesperson Theo Nkonki confirmed the province’s debt to the municipalities, totalling more than R340m.
“The metros' figures are not verified but we owe them and we are in talks with regard to settling the bill,” Nkonki said.
They had since increased their budget to more than R1bn to ensure all rates and services were paid.
Ekurhuleni spokesperson Themba Gadebe said as of end March, the Gauteng provincial government owed them more than R69.9m.
“Debt owed by department of health is R9.3m and department of human settlement owes R2m,” Gadebe said.
He said national government departments owed Ekurhuleni R19.5m. “This amount owed is for services other than rates, which are paid separately. Payment is usually settled by the end of the following month,” he said.
Gadebe said, however, they have received more than R155m for rates from both provincial and national departments.
“The payment performance by both national and provincial governments for rates is acceptable,” Gadebe concluded.
The City of Joburg is owed an estimated R200m by the provincial government. It is not owed anything by the national government.
Spokesperson Kutlwano Olifant said the city is self-funded, meaning its capital budget is collected from rates and services paid by their clients.
“It must be noted that failure by any account holder to make their monthly payments on services they consume and we bill them for, impact negatively on service delivery,” Olifant said.
She said an estimate of more than R100m for rates and taxes is owed to the city by one of the provincial departments. She did not name the department.
“The city has set up interdepartmental engagements to address these challenges to address settlement of arrears,” Olifant said.
Tshwane spokesperson Goitsemang Molaeng said they were owed R252.8m by the Gauteng provincial government, with the biggest culprit being the department of infrastructure development, whose rates and taxes and services accounts owe R200.5m in total.
Major buildings, such as the Union Buildings in Pretoria and the headquarters of the police and South African National Defence Force, all fall under this department.
Molaeng said that, as of March 31, the national government owed the City of Tshwane R67.6m.
“Underpayment by government departments is impacting on service delivery and it is an extra burden to the city in terms of available funds to use on service delivery,” Molaeng said.
She said a dedicated team at their debt-collection unit is working with government accounts and engaging with the relevant officials at the provincial and national governments to recover the outstanding funds.
Molaeng said the SA National Roads Agency (Sanral), public works, the department of international relations and co-operation, national intelligence and home affairs as the major culprits in non-payment of rates and services.
National treasury spokesperson Jabulani Sikhakhane said they were aware that Tshwane and Ekurhuleni recorded in their financial reports to the treasury that they are owed money by the government.
Sikhakhane said an intergovernmental forum has been established in each province to address the outstanding debt from the government. 
He said the root causes of non-payment could range from operational issues at the metro, to ownership of the properties at provincial or national level.
“Bills could, for example, be delivered to a wrong department. It is common knowledge that metros are moving away from allowing tenants (user departments) to register for services and instead register the owner of the property (national or provincial department of public works) for services and property rates.”

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