The City of Johannesburg (CoJ) cut off services for customers who collectively owe more than R1 billion in municipal services on Thursday. The cutting of services is part of the City's aggressive Credit Control Campaign to recoup the City’s municipal debt of more than R52bn.
CoJ spokesperson Nkosana Letjokolo explained that services are only being cut off for defaulting customers who have consumed the most services and owe huge amounts of unpaid accounts. "It is those who owe huge amounts and consume large amounts of water and electricity," said Letjokolo.
The campaign is gunning for massive residential estates, investment firms, hospitals, car dealerships and a university, among other defaulters.
Group Chief Financial Officer Tebogo Moraka alluded that the metro is buckling up to hold defaulters accountable who continue to abandon their responsibility in settling unpaid accounts.
"This City is going full scale on an aggressive credit control campaign citywide, targeting, specifically, those customers who are hiding from paying the City. The message is clear, the City is coming after all perpetual defaulters who do not want to engage the City about what they owe," said Moraka.
Moraka further said that the metro will ensure accounts are settled by using all of its available resources, including cutting off services, blacklisting defaulters, litigation to recover monies owed and sale in execution.
The Gauteng High Court Local Division ruled in favour of the metro on a judgement appeal against Malakite and Greenstone Crest Body Corporates this Monday for unpaid municipal services.
The appellants had been defaulting to pay for “business tariffs” of municipal services. The appeal comes after the appellants had sought to appeal the earlier judgement, which found the City was correct to charge the appellants for business tariffs because the estates fall under “mixed domestic and non-domestic loads” due to the presence of lifestyle centres within the estates.
The appeal was dismissed with costs as the Court found the arguments by the appellants non-persuasive.
The Court also dismissed the body corporates' argument that the lifestyle centres, within the estates, should be seen as part residential components.
"The tariff applied is determined by the nature of the service available. For instance, if a property designated for residential use is utilised for commercial purposes, such as operating a law practice, the appropriate commercial tariff would be applied due to the electricity consumption associated with activities; like operating photocopy machines, computer services, printers and other business-related equipment. Similarly, the electricity usage patterns of establishments like gyms or restaurants differ from those of residential dwellings, thereby warranting disparate tariff structures," read the judgement.
The Court agreed with the CoJ to charge the body corporates under a business tariff because the restaurants and gyms consume electricity in their lifestyle centres.