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Help, City of Joburg is killing my business!

Electricity billing dispute has Ice for Africa on its knees.

George Peters, owner of the 26-year-old Ice for Africa doubts whether his business will survive the next few weeks after his power supply was cut following a billing dispute with the City of Joburg.

Ice for Africa produces ice on a site spanning seven plots in Delarey, Roodepoort, which is in the jurisdiction of the City of Joburg.

The business that distributes ice to about 1 000 customers in four provinces, including branches of Pick n Pay, Spar, Shoprite, OK stores, garages and bakeries is electricity intensive. It has the capacity to produce 30 to 40 tons of ice daily and has purification and packaging plants on site as well as storage capacity for 1 000 tons of ice.

According to Peters, the property in question uses about R100 000 worth of electricity per month. It is one of six neighbouring properties on which his business is situated.

He says he has had issues with the municipal billing on the site since he bought it in 2012.

This however intensified at the end of 2016 and into 2017 when the City of Joburg stopped sending him bills for the property, because it was consolidating the bills for three of the properties.

Not knowing what the new account number of the consolidated account would be, he kept a reserve for the day he would be able to pay.

Around April/May last year he eventually got the bill, but it was exponentially more than he expected at over R2 million.

Peters registered a dispute and accordingly got a reference number. Talks however stalled when the City of Joburg required him to pay half the amount it considered to be outstanding and give an undertaking to pay the balance before it would attend to the dispute.

He just didn’t have the money to pay it.

He made a payment for the current accounts, but the city allocated the money towards the huge, disputed amount instead. “It went into the big, black hole,” Peters says.

City of Joburg recalculated the bill over an extended period and Ice for Africa was even deeper in debt.

Knowing that the disputed amounts would not be ring-fenced, Peters stopped paying the City of Joburg.

After several pre-termination notices employees of City Power and the Johannesburg Metropolitan Police Department (JMPD) arrived at the premises on November 22 last year in six vehicles. “There were 15 to 20 people,” Peters says.

According to that termination notice he owes more than R5 million.

After some tense interaction they removed the circuit breaker and cut three cables, each about 5cm in diameter. They even dug up the first metre or two of each cable outside the mini-substation and sawed that off with a hacksaw.

This was done despite a notice on the outside of the box indicating that there was an outstanding dispute on the account, Peters says.

Since then Peters has been running his business with a generator that costs him R12 000 per day for diesel alone. His production in what should have been peak season for an ice business is at 70% to 80% and his wastage is up from 2% to 3% to 35% to 40%.

He says Ice for Africa is two or three weeks away from closing down, which would leave his staff of 65 without jobs.

Specialised electrician and forensic investigator Eric Bott has analysed his metering and billing and is convinced that Ice for Africa does not owe the City of Joburg more than R500 000.

He says there are mistakes on the bill and some readings are estimated based on earlier, wrong readings. The recalculation was unlawfully done over a longer period than the six months the by-law permits, he says.

Attorney Len Dekker, who is an expert in municipal matters, says municipal customers are entitled by law to accurate accounts. He says Section 62 of the Municipal Systems Act provides for customers to declare billing disputes and suspends all credit control with regard to such disputed amounts.

He says the municipality has an obligation to resolve the dispute within a reasonable time. Customers should be allowed to continue paying current amounts while the dispute is under consideration.

Dekker says if Ice for Africa incurs damages due to non-compliance by the City of Joburg, it would be entitled to recover the cost through a civil lawsuit.

Following several letters to the City of Joburg, including Mayor Herman Mashaba, Bott met with city officials on Monday morning in an effort to resolve the matter.

Peters however doubts whether the officials will act in time to save his business.

The City of Joburg did not respond to questions from Moneyweb.

* Last week City Power officials arrived at Ice for Africa to cut the power supply to one of the other properties. After being shown proof of payment they left without disconnecting the power supply.

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The solution would be to get clients account queries sorted quickly. This account has been allowed to get totally out of hand. Needs someone senior to make some tough decisions. If the business fails they get nothing, if the help him – they stand some chance of recovery of some cash and the people keep their jobs and livelihood.

One more reason to get off the grid entirely.

Agreed that’s a wrong business to run on-grid.

Invest in a source of power that will repay itself in 5 to 10 years and depreciate the investment capital.

In agreement. Ammonia refrigeration is expensive to setup but almost entirely free of electricity

China make good quality domestic fridge/freezer combo’s. Can see these making their way to South Africa if Eskom/Municipalities continue ripping off consumers

Not only in JHB all over the country. The incompetents get the position and cannot do the job. Nepotism, corruption all in one.
In my municipality the white woman who was the financial controller was first made acting then fired. Trumped up charges, then a friend of the mayor got the job, permanent from the get go. Ex health official, only money he had ever handled was his paycheck.

Thank you President Trump, for confirming S#^H$%#, and we were so hopeful that things would be different when the DA run the city. This is a disgrace.

Wow & the brave men JMPD, coming with 15 to 20 men, however, when you need them to sort the S#$&H*$# traffic then they are no where to be seen.

Well done!!!!!!!!!!!!!!!!!!!!!!!!

Calm down.
15 to 20 is 33% difference to be noticeable. Whatever the number, how many were they supposed to be?

This whole problem started with the ANC’s corrupt billing tender, which went very wrong, but also has roots in the legacy of non-payment for electricity.

If the city had boroughs were your problem was solved closer to your place of work or home then it would be easier to sort out.

The ANC has throttled the city with its corruption and now the DA has to sort it out.

Eskom does similar things, how can it be legal to say pay the amount before disputing.

SARS also does this, this is not the case in any other business situation. You can dispute then settle once finalised.

COJ & Eskom have so many errors across their customers, it must come up to billions.

The business uses R100K per month.
Between 2016 and 2017 when statements were not sent, it appears Mr Peters stopped paying. Although the story does not say for how many months he did not pay.

“Specialised electrician and forensic investigator Eric Bott” claim the bill cannot be more then R500k. This effectively assumes that Mr Peters would have skipped payment for less than 5 months given that at R100k per month it would have taken 5 months to reach the R500k.

To insinuate that Mr Peters does not owe the said amount and that the claimed “less R500k” by Eric Bott is correct would be naive.

“Not knowing what the new account number of the consolidated account would be, he kept a reserve for the day he would be able to pay.”

Wouldnt you just need to make a phone call to find out what the new account number is instead of sitting on your hands and hopping the City will forget about your bill?

Hi.

City power’s call centre is pretty useless and will happily give you the wrong info or the run around for months. Its pure luck to come across a supervisor or the odd person who can genuinely asssist you.
You actually do need to go in or contract someone to do it on your behalf to sort out this kind of thing because otherwise you get nowhere.
And even then its an uphill battle and sometimes takes a few tries to get sorted.
Ideally, yes, all we should need to do is pick up the phone and log the query or get an account number.
The reality of dealing with them is very different.

I’m telling you the authorities are not interested in boosting economic growth and creating jobs. Their actions show their true intentions.

they don’t have the savvy…..as plain and simple as that.

This is definitely an issue that many have experienced with the CoJ…but why does one business get to air its grievances on Moneyweb? Should this not be on hellopeter rather?

Johannesburg City Council worked before 1994. There was rarely a billing problem. Bring in the ANC and their cadre, with contracts for friends and family and rampant incompetence and corruption and you have the start of a problem. Add to that the increasing number of people, who previously did not pay electricity, now paying, together with the vast number of people moving into Johannesburg and there is a guaranteed problem. And now, it seems that even the DA cannot appoint an honest finance chief. So do not hold your breath. This is the inevitability of Africa. It will be only when the entire continent is a poverty wrecked dust bowl with a few enclaves for the mega-corrupt, that someone might decide to actually attempt to resolve the problem. And that, unfortunately, will be by revolution, not reason.

I see it over and over again, staff are just not interested in providing service, being professional and getting the job done with some sense of urgency. I was in a well-known CD store the other day and the staff were huddled around a small screen (watching something) when I entered and made no attempt to life themselves and offer service. It is disease from which we will die as an economy. When there is no one to promote a work ethic and service culture this is what happens – trade unions actively promote doing as little as possible as a worker. I think ‘freedom’ for some people is sitting around chatting all day i.e. freedom from work. And from this they expect ‘economic freedom”. No chance, the world she don’t work like that. To get ‘economic freedom’ you have work and work hard because it is not easy and sometimes the rewards aren’t even there. As a nation we are doomed.

The only way this company will sort out the matter is to seek a discussion with the MD of City Power – I did and got to get a discussion with some 6 of his colleagues and when shown the facts they reversed some R 2,500 over charges on my suburban residency. There is only one way to resolve issues in sunny SA and that is engagement with your protagonist. I could write a book on the number of complaints written to SA companies and not one has been settled acrimoniously – so be persistent, but also have your facts available

What is tragic about this situation is the fact that the biling system has been broken for years now, well back into the ANC’s management responsibility timeline. Despite thousands of complaints regarding incorrect billing statements, nothing was done to rectify the system and the situation continued to worsen. However one sympathises with the appalling state of the accounting process, the sheer volume of errors militates against a quick fix and certainly the period in which the new management regime has been in the saddle has not been sufficient in my opinion to even establish the extent of the problem let alone enough time to rectify it.
I don’t know exactly what the state of the programming responsible for billing is, but one thing is evident, trying to catch up on past hash ups and still provide accurate current data is not going to work. What is needed is the installation of a robust system without delay, (there must be systems available from metros that are on top of the billing operation either in South Africa or elsewhere), that can be installed reasonably quickly and then static data from existing records transferred across and a starting point set where all billing starts from scratch. If properly done current accounting could then proceed and be properly controlled and the backlog and inaccurate processing could be investigated offline. There has to be a break between a clearly deficient system and one that is robust and accurate. It is appalling that this situation has been allowed to develop and is an indictment on those resonsible, who should be held to account.

Just another case of our government’s incompetence to run their municipalities effectively.Apparently they are owned millions by municipalities right across the country and are unable to control maladministration and misappropriation of funds.
They keep talking about job creation. This is a case of job destruction and can only have a negative influence on our economy in general.

Hire transport for the 65 employees and let them collectively go discuss the matter with the municipality.

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