Msunduzi Municipality faces R2 billion debt burden due to theft of services and non-payment
The Msunduzi Municipality city hall.
Image: Doctor Ngcobo Independent Newspapers
The debt crisis in Msunduzi Municipality is worsening due to theft and non-payment for services, with the municipality now owing its key service providers close to R2 billion. Reports detailing the payments owed to Eskom and uMngeni-uThukela Water Board reveal that the municipality owes these two entities close to a billion rand each.
The details of the debt are contained in a report tabled before the city’s Municipal Public Accounts Committee, which was presented at its recent meetings. City councillors have attributed the debt to the theft of water and electricity, estimating that this theft costs the municipality about R3 million each month.
Councillors have raised concerns about thousands of bypassed water and electricity meters in the city, which prevent the municipality from generating revenue from these services. They noted that city officials have failed to act against theft and non-payment, causing the city to accumulate this debt. The municipality has been actively trying to collect what is owed by businesses and government entities, employing harsh tactics, including the disconnection of electricity to businesses and even schools.
The financial statement, including payment notifications contained in the report, shows that the municipality is making payments. One statement of accounts attached to the agenda indicates that as of March this year, the municipality had a balance due to uMngeni-uThukela of approximately R980 million. This includes about R663 million that is more than 120 days in arrears, R93 million that is 90 days in arrears, R42 million that is 60 days in arrears, and more than R80 million that is 30 days in arrears.
The account summary for February this year for the city’s Eskom account shows that the total due is just over R1.052 billion. Bank statements confirm that the municipality has continued to make payments towards its debts.
Rienus Neimand of the ACDP expressed concern over the massive variations that have led to the adjusted budget. He further noted that the administration presented the National Treasury with an unfunded budget that has been rejected. “The huge deficit in collections and the spiralling increase in theft, along with the forfeiture of grants due to non-performance, is a sure sign of a dysfunctional administration. Furthermore, the escalating debt to uMngeni-uThukela Water and Eskom is a sign of an administration out of control. The Section 106 investigations implemented by national and provincial Cogta into maladministration, corruption, and theft show that the governing ANC minority is a party to this chaos,” he said.
The DA announced that it will table a budget plan it claims will rescue the municipality, addressing the issue of this debt as part of that plan. The council is set to table its budget for the 2025-2026 financial year on Wednesday.
MPAC chair councillor Zwelinjani Magubane said there has been negligence on the part of the officials, adding that the situation was unacceptable as it continues to compromise the municipality's finances. “They have let this situation get out of hand. How are they going to collect a billion from people? They have been trying to collect, but they have not been aggressive enough. There are still companies that owe millions to the municipality that have not been sanctioned. What we have found is that people are just stealing and not paying. There are poor people who cannot afford to pay, but there are wealthy individuals who can pay but choose not to, and those are the same people that owe the most to the council,” he said.
Magubane said they have asked for a breakdown in each ward to see who was paying for services and who was not and why.
Municipal spokesperson Ntobeko Mkhize confirmed that the municipality owes a combined R2 billion to these entities, saying the municipality has entered into a payment arrangement with both Eskom and uMngeni-uThukela. “The arrangement with Eskom is for three years, which started in 2024, and it is now in its second year. The one with Umngeni is for five years and is also in its second year,” she said.