The City of Cape Town has announced that it will continue to implement effective debt management measures against residents or businesses that have not utilized the city's offerings to settle outstanding debts.
As of the end of June this year, the City of Cape Town had outstanding bills for charges and services totaling an impressive 8.1 billion rand, which is higher than the 7 billion rand recorded three years ago. During the same month, 87.3 million rand was written off as bad debt.
This data was presented in the collection rate and debt management measures report, which was submitted to the Financial Portfolio Committee last Monday. This report followed concerns raised by payers, observers, and political parties two months ago regarding who benefits from the city's fixed municipal charges.
The report detailed the 8.1 billion rand amount: residents owe 5.2 billion rand, businesses owe 2.1 billion rand, the government owes 402 million rand, and other unspecified client categories owe 384.51 million rand.
The total amount of overdue payments exceeding 60 days at the end of June was 5.3 billion rand, which is 42.6 million rand less than the previous month. Analysis showed that only about 1.46 billion rand of this 5.3 billion rand is subject to debt collection.
Nevertheless, the City is taking steps to manage debt against the 1000 largest debtors, government departments, state-owned enterprises, and council members and employees with outstanding debts. The report demonstrated that commercial and/or industrial entities predominate among the city's top 1000 debtors, although some sectional title properties were also listed.
A special action plan has been developed for these properties, and final warnings and service disconnection/restriction notices have been sent to them. The outstanding debt for the 1000 largest debtors as of June 30, 2026, amounted to 1.337 billion rand.
Furthermore, the report indicated that the City will continue to demand payment of outstanding debts through effective debt management measures against residents or businesses that have not applied for city benefits. These measures may include disconnection of water or electricity services, collection of all overdue debts through prepaid electricity purchases, and inclusion of property owners in negative credit history lists in relevant credit bureaus.
There is an option to transfer accounts to appointed lawyers to initiate legal proceedings, which could lead to the sale of property to recover municipal debts. The report emphasizes the importance for all property owners, tenants of municipal housing, and borrowers to pay bills in full by the due date or negotiate repayment of overdue debt within an agreed period based on their ability to pay, to avoid debt recovery actions.
Additionally, it was reported that SMS messages and emails will continue to be sent to those with debts, and press releases will be issued urging debtors to repay their debts or enter into payment agreements. According to City data, final demands and SMS notifications will be sent monthly to debtors whose accounts are overdue, and debtors eligible for social assistance will be registered in the needy registry.
The report also showed that the total debt owed by all employees and council members amounted to 22.3 million rand, including the current amount due in June but not yet payable. The system continuously identifies employees and council members with unpaid municipal charges and services. Although council members had no debts, the total debt of employees older than 60 days reached 3.7 million rand, an increase compared to May. This increase is attributed to the hiring of new employees with existing debts older than 60 days.
The City stated that debt management measures, as well as salary deductions, continue to be applied to employees who do not apply to pay or enter into an adequate agreement to repay their municipal debts. In June 2026, 6,693 monthly salary deductions totaling 8.356 million rand were implemented. The City reported that no new cases were transferred to the lawyers' panel for the initiation of legal debt recovery processes in June. Currently, lawyers are handling 19,673 accounts with debts of approximately 1.7 billion rand. Similarly, there were no foreclosures in the same period. However, in June 2026, lawyers attached movable property for execution sale in 19 cases with outstanding debts totaling 684,600 rand.
The City interacts with government departments to settle debts. National government departments owe 140.63 million rand, and their provincial counterparts owe 114 million rand. Monthly meetings with the relevant departments and the Provincial Treasury have been planned and are underway.
