THE Kouga local municipality (KM) does not have any intention of paying the huge interest amount charged by the Nelson Mandela Metro for outstanding debts for water services.
According to reports the metro are charging the KM nearly 20% per annum on the outstanding debt amount, or R400000 per month. This response follows a proposal by the chief financial officer of the metro Kevin Jacoby, that the Local Government and Traditional Affairs MEC, Mlibo Qoboshiyane intervene to assist them to recover the R24-million owed by the KM.
However, Mfundo Sobele, communications officer of the KM denies they are paying interest saying: “The amount of R24-million is inclusive of the current account which totalled R2-million and which we have already paid. The additional amount which is R500000 that we are paying is not interest, but is part of our arrangement with the NMBM and services the debt that is in arrears.”
In a report to council Jacoby states that at the end of January this year Kouga owed the metro R25-million, and that they have signed an acknowledgement of debt amounting to R24-million on September 9 last year, and committed to liquidating the amount in monthly installments of a minimum of R500000 and a maximum of R1-million from the end of September.
He said Kouga had honoured its undertaking, adding that the reason why the debt had not decreased over the four months that it had been paying was because of the interest of approximately R400000 that accrued each month.