DA wants Siyathemba Municipality’s debt collection contract investigated

by Ismail Obaray – DA Constituency Head of Central North

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Date: 01 March 2018

Release: Immediate

The DA has asked the MEC of COGHSTA, Bentley Vass, to investigate Siyathemba Municipality’s use of a non-performing debt collection company that cost the municipality at least R1,7 million, if not more.

Zandile Management Services, headed up by well-known entrepreneur, Fikile Michael Bili, was appointed by the municipality back in November 2014 to collect long outstanding service bills. Throughout the entire term of Zandile Management Service’s contract, however, they did nothing other than send out bulk smses to all debtors of the municipality, regardless of whether the debtors were in arrears or not.

Unsurprisingly, debt collection never improved and long outstanding debt owed to the municipality remained in the region of approximately R70 million.

Based only on the invoices that the DA is aware of, Zandile Management Services was paid on average R50 000 every month for 31 months. This is in spite of the company having no traceable evidence as to how much the agency allegedly collected from debtors, and who these debtors were. Instead the company merely submitted a blanket claim of 12% of the total revenue received by the municipality on a monthly basis, even adding VAT to its charges.

This amounts to daylight robbery.

The matter was raised in a Municipal Public Accounts Committee (MPAC) meeting whereby a decision was taken to suspend further payments to Zandile Management Services. This decision, however, was only taken in the same month that the contract was due to come to an end in any case.

The DA believes that Zandile Management Services has ties to connected politicians and officials, who helped facilitate the contract and protected the passive income being drawn by the debt collection company over the almost three year period.

The DA wants MEC Vass to probe the matter. He also needs to establish why contract management was not implemented sooner and whether lost funds can be recouped.

We also suspect that Zandile Management Services has contracts with other municipalities in the Northern Cape and will submit a parliamentary question to Vass in order to establish just how deep the company has its claws in local government.

Service delivery and debt collection go hand in hand. If revenue collection is not taken seriously, and continues to be sabotaged so as to enrich a connected few, it will ultimately result in the collapse of our rural municipalities.

The Marydale, Niekerkshoop and Prieska communities deserve better. The R1,7 million paid to Zandile Management Service is in effect fruitless and wasteful expenditure and could have instead been channeled back into upgrading water and sanitation infrastructure, scraping gravel roads and, not least of all, creating an environment where real business can flourish and where tenderpreneurship is eliminated once and for all.