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Prepaid sub-meters significantly lower municipal risk


n a downturn economy the struggle for municipalities to collect on utilities increases significantly. With municipalities like Ekurhuleni saying that illegal and bypassed electrical connections costing R1.2 billion just last year, finding a solution to utility management has become critical. Fortunately reputable prepaid utility sub-meter providers can help with at least a part of the municipal customer base: formal and backyard rentals - thereby reducing the drain on municipal resources and help ensure they are able to honour their commitments to Eskom.

sumption empowers tenants to change their usage habits and better manage their utility budgets. Also, prepaid means they never find themselves with an electricity bill that they cannot afford that could potentially bankrupt them and force them to take desperate measures like absconding. Prepaid sub-meters lower the chance of disputes arising making for a much better tenant / landlord relationship and, more importantly, ensuring that landlords are paid so they can then pay their municipality, which in turn can honour their Eskom commitments.

According to a report for the World Bank, more than 13% of urban households in South Africa reside in backyard struc- Illegal Connections tures and that number is set to climb as more people flock An unfortunate reality is that some landlords avoid paying the municipalities by illegal connections, essentially by byto the cities looking for work. Many property owners rely passing the main meter. The only way to police on these informal rentals as their primary source this is with monitoring purchasing patterns of income. However, managing and collect“Traditionally, combined with a regular meter inspection ing utility payments from tenants, whether landlords either cycle. formal or informal, is an ongoing risk for divide the total bill In exceptional cases the main municproperty owners. by the number of ipal meter is replaced with a prepaid tenants or use meters to sub-meter, either in error, or as an at“Traditionally, landlords either divide measure consumption tempt to defraud the Landlord and Muthe total bill by the number of tenants and then bill their nicipality. or use meters to measure consumption tenants once a and then bill their tenants once a month. month. Fortunately, reputable sub-meter providers This can result in disputes and tenants withhold the answer. holding payment, or more frequently, tenants absconding without paying their bills. This can put landlords under pressure since they are still liable for mu- “Working with signed NDAs in place, Citiq Prepaid has alnicipal payment but may themselves no longer be in a posi- ready helped a number of municipalities track and trace tion to do so. Landlords unable to pay their municipal bill in fraudulent activities. We are able to assist with a full transturn puts the Municipality under pressure,” explains Michael action history for suspect meters, masked bank account information and even ad-hoc investigations. We also asFranze, Citiq Prepaid Managing Director. sist with full disclosure in criminal prosecutions. In short, The benefits that landlords get using prepaid sub-meters installing a Citiq Prepaid sub-meter is the stupidest thing a extend to the municipality too. Prepaid sub-meters continue fraudster can do,” Franze comments. the chain of payment trust from tenants all the way to the Power and water remain scarce resources in South Africa Municipality and even Eskom. and protecting our fragile supply is in everyone’s interest. Prepaid sub-meters allow tenants to see exactly how much Prepaid sub-meters could very well be the elusive missing electricity they are using. This immediate feedback on con- link to achieving real resilience.


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Municipal Focus Magazine - Volume 51