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Rental debt headache for Public Works


One of the biggest challenges the Department of Public Works is facing is outstanding rent owed to the department, acting Head of Department Ray Malele informed.
Malele and MEC, Jerry Ndou appeared before the Legislature’s Portfolio Committee on Public Works, Roads and Infrastructure last week to account to the committee regarding its 2014/15 audited financial statements and this year’s expenditure.
At the end of September this year the outstanding rental amount owed to the department by tenants, both public servants and private individuals, was more than R66 million.
Malele said uniform amounts are charged per “room” as the housing is euphemistically called, the current rate being R900 per month with the location of the housing not taken into account, thus a person living in a tin shack on a project could pay then same as someone staying in a town with all amenities. Many tenants have therefore vacated government premises. A big problem also exists as not all rentals are collected by means of a stop-order by departments and when tenants have rental debts it is not reflected in departments’ records. When such officials exit the public service while owing rent, their benefits are released without considering outstanding rents and such debts ultimately become uncollectable.
The department has now established a debt and revenue management unit with dedicated officials to implement Operation Hakela, a programme to optimise collection of revenue, as from August this year.
“A big problem encountered by the department is the dilapidated state of the rented housing due to inadequate maintenance,” according to Malele. The department also charge a flat rate for municipal services, as there is only one meter reading for all properties in one facility, but the municipalities are charging based on actual consumption, thus the department is losing out on income. Lease agreements are also not reviewed and the timely forwarding of staff debts for capturing does not always happen. The department also does not have keys to their properties and the legal route for debt collection and evictions take a long time. More than R8,5 million of the debt has been handed over to legal agencies and lessees are pending evictions.
The department also showed a R2, 3 million staff debt as at 31 September 2015.
Committee Chairperson Rudolph Phala said the rental problem is older than ten years and it should be solved now, as hundreds of millions of Rand are lost that should have been used for service delivery to the people of the province.

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