STATEMENT BY THE CITY’S MAYORAL COMMITTEE MEMBER FOR FINANCE, ALDERMAN IAN NEILSON
The City of Cape Town continues to disconnect services of the Passenger Rail Agency of South Africa (PRASA). The disconnections should not affect the operation of the trains and thus commuters.
This is as a result of PRASA repeatedly failing to pay municipal rates and services debts of approximately R114 million to the City, of which R98 million is the arrears amount.
Eskom recently disconnected some of PRASA’S train operations for non-payment of debt to the value of only R6,5 million leaving passengers stranded and no trains operating.
It must be noted that the City’s stance remains that it will act against debtors who have the means to pay but refuse to do so as unpaid debt means that there is less money available for service delivery.
The fact is although PRASA made a payment of R86,7 million at the beginning of February 2020 against their previous arrears of R168 million, no firm payment arrangement for the outstanding arrears amount has been made. It was indicated that a part payment of R22 million would be made by Monday, 9 March 2020 but it appears that the money has not been paid and is not sufficient in any case to avoid the disconnections.
In terms of its Credit Control and Debt Collection Policy, the City is entitled to disconnect services as a result of PRASA’s repeated failure to pay for services.
It must be noted that this decision has not been taken lightly and it has come after many years of engagement. Furthermore, PRASA is not paying their monthly current accounts. The City must be managed in a sustainable manner for the good of all Cape Town’s residents. Even some of the most vulnerable residents in our city make an effort to pay what they can and we cannot excuse PRASA for non-payment of services that have been received.
The City has to make provision for bad debt in its budget, which means that fewer services are delivered. If those who have the means to pay refuse to pay for services that they use, it has a large impact on the sustainability of the City and it impacts our absolute desire to make this great City even greater for all who live in it. Debtors must service their debt every month. Prasa must do so too. Once off payments are not acceptable, especially considering the ends to which the City has gone to ensure that Prasa pay the outstanding debt.
For our society as a whole as well as for this municipality, it is vital that we instil a culture of payment and drive the message that we all have rights but we have responsibilities too.