A company, Zoloscore Investments, owes the eThekwini Municipality millions of rand in unpaid fees for services.
A report tabled before the council last week shows that Zoloscore has failed to pay the rates, services and costs incurred by the City to secure its damaged building. The revelations have triggered calls from councillors for the City to tighten its by-laws to ensure it has the means to hold developers to account.
The report breaks down the debt owed to the City by this company into two parts. The first part relates to its building, which was damaged by fire and had to be demolished, while the second part pertains to the accounts for its municipal services.
The report states that Zoloscore owns several sectional title units.
“The building forming the sectional title scheme was extensively damaged by fire on or about January 21, 2022.”
Zoloscore was ordered to demolish the building because it posed a danger.
However, it failed to do so, causing the City to incur additional costs for the demolition.
“eThekwini was of the opinion that this building had become dangerous to life or property and accordingly ordered its owners to demolish it.
“The company failed to demolish the building and the eThekwini Municipality approached the High Court. The court authorised the municipality, in the event of the company failing to secure the building, to do all necessary to secure the property,” said the report.
The report indicated that the court had directed that the company pay all costs incurred by the eThekwini Municipality as a result of securing the building.
It stated that the company failed to secure the building and needs “to ensure that the building did not constitute a danger to both persons and property, provided services in securing the building at a total cost of R11.5 million”.
“A debt of R13.3 million, inclusive of interest, remains unpaid.“ The report details the amounts claimed for services, revealing that the company has three accounts in arrears.
In its recommendation to the council, it noted that the amounts owed by Zoloscore Investments (Pty) Ltd as of September 30, 2024, were as follows:
- One account for water, electricity, and sanitation and sewage disposal: R7.6 million
- Another account for electricity supply: R662 000
- An account for water supply: R171 000 - it also found that the company owed
- The sum of R11.1 million owed in rates
- The sum of R13.3 million in respect of its claim for fire services
“Upon inquiry about the municipal action taken regarding the outstanding prior debt owed for municipal services, information was provided that the
Municipality had already commenced action. However, this was halted due to court proceedings, as all monies owed by Zoloscore Investments (Pty) Ltd had to be consolidated. It is also noted that the final cost of the demolition of the building has not yet been quantified since the demolition process is still under way.
“Only upon completion of the process will the final demolition costs be added to the consolidated amount,” said the report.
ActionSA councillor Zwakele Mncwango stated that the City should learn from this experience to ensure that it can hold developers accountable.
Rory Macpherson of the DA said, “The company failed to pay utility charges, it failed to pay rates, and it failed to pay for the demolition charges.
I doubt that the land value, as that is all that will be left, is worth the millions incurred by the City, so the City is going to suffer a financial loss.”