City gives Prasa more time to pay
05 March 2020
Statement by the City's Mayoral Committee Member for Finance, Alderman Ian Neilson
In the event of further non-payment, the City of Cape Town has made the decision to disconnect some services of the Passenger Rail Agency of South Africa (PRASA). 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. Disconnecting the services should not affect commuters. If payment is not received by tomorrow Friday, 6 March 2020, services will be disconnected on Monday, 9 March 2020.
In terms of its 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 the residents of Cape Town. 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.
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. The City’s disconnection will only affect PRASA’s offices and facilities and will not impact on the running of the trains. 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 and no indication has been given of future payments.
The City continues to 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 City thanks its ratepayers and customers for continuing to pay their rates and services bills. Payment means that services can continue to be delivered to all.
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.
End
Published by:
City of Cape Town, Media Office
