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Services billing standard plan to restore public trust

A services billing standard would allow municipal clients to understand privatised water and electricity invoices, according to 2012 research.

“A lack of understanding of municipal services invoices has a negative effect on customer awareness, participation [in payment and policy], and regulation of water services. It also leads to distrust in the correctness of invoices, which in turn affect consumers’ willingness to pay” according to a study by the SA Water Research Commission (WRC) in African and other countries.

Municipal invoices in South Africa could be standardised, since they “have much to improve on before they would function as a tool to serve consumers and use our water resources effectively,” concludes the 2012 study, following several years of water and lights billing chaos, expensive privatised billing and IT contracts, attempts to install low quality prepaid water and electricity meters, and consumer services protests.

Billing contractors not compliant

“In particular, South African invoices are not standardised at all. Most invoices do not meet regulatory requirements. Most invoices are barely legible as they are not in plain and understandable language as required by the Consumer Protection Act, 68 of 2008, and far from being user-friendly”, says the WRC finding.

The academic research body is desperately seeking solutions to losses in municipal services, admin and income capacity and credibility, appealing to media, including Sheqafrica.com, to raise the matter of inconsistent, in-transparent, low quality and fraudulent billing practices with local authorities.

Among the major billing and debt recovery contractors in Johannesburg, and several other cities and towns, are African Meter Reading, Global Metering Services, Micromega and Rubbytad. Micromega had been under fire from civic activists and protesters for its high cost, low quality, and chaotic service, amounting to predatory privatisation of basic service administration, and alienation of consumers from local and state authorities.

Johannesburg city council had made a series of promises to fix the billing saga, including repeated attempts at predatory valuations to raise income, met with a series of protest and political actions from civil society, labour, and opposition parties.

Cape Town uses contractors C&A Johnson Meter Readers, Meterwise Enterprises CC, and alternative contractors WH Boshoff Meterlees Dienste BK, Micromega Revenue Management Solutions, Ikapa Reticulation and Flow CC, and Yrs 2 Electricity Meter Reading.

These contractors render services like “delivery of warning notices to disconnect supply, disconnection, reconnection, and special Investigations to address data purification and meter reading problems”.

The WRC study found that consumer behavior and culture at local level, the primary contact between people and state, suffers from lack of fairness and lack of trust, with negative impacts on services losses, environmental impacts, and related conservation behavior.

Municipalities and employers alike face issues of environmental and social impacts, remedied by social compacts. Public and private corporate social investment (CSI) projects depend on social participation and trust in authorities, being eroded by rising costs and profits of private contractors.

Water and electricity savings not cited

“Most municipal invoices are not customer-orientated. South African has 11 official languages, but invoices are still presented in English only. Most invoices do not communicate water conservation and effective water use.

“South African invoices do very little to reduce our water and energy footprint and lag far behind international best practice in this regard.  Municipalities miss the opportunity to brand water conservation through their invoices.

“Invoices could also be a tool to set consumption targets, or note incentives for conservation. Very few municipal invoices show comparative or historical consumption information, which has been proved to positively influence consumer behaviour.”

A quantitative survey of 2500 urban respondents started two years ago by Sarah Slabbert Associates, now questions the integrity of South African municipal invoices, as 35% of consumers doubt the correctness of their municipal invoices.

“Consumers struggle to find basic information on municipal invoices, such as amount owing from previous months, meter reading dates, water use, and free basic water allocations.

“Only 7.4% of respondents could find their water use on an invoice that scored an average 4.8 out of 10 on a municipal invoice EMI rating.

“It is common practice on municipal invoices to use numbers without units (R or kl or MW)… including codes that are meaningless to consumers.

“Acronyms and abbreviations such as ‘cons, w, bas, char’ difficult to decipher. Consumers struggle to understand words like ‘arrears, remittance advice, rebate, consumption, opening balance, balance brought forward, previous’.

“Simple changes dramatically increase consumer understanding of municipal invoices. Improved understanding strengthens consumers trust in the correctness of the information.”

Service billing standardised

WRC service billing research project leader Dr Sarah Slabbert, said “municipal invoices, if used properly, present a significant opportunity to engage customers in water conservation, water regulation and planning.

“The WRC has created a platform for South African municipalities to work towards improving their compliance, and standardising their domestic municipal invoices.

“The Standards Document is an effort to steer municipalities, financial services, businesses and customers towards quality and efficiency in water management.”

Standards and model invoices were developed and tested in the study, aiming to raise consumer awareness and involvement in water and energy footprint reduction.

New billing software

Jay Bhagwan, WRC director in Water Use and Waste management said new software developments and technology held “exciting possibilities to address shortcomings in the design and communication of municipal invoices.

“Opportunities include invoices and payment activation via SMS, e-mail and web.” The research body also wants local authorities, and their private contractors, to explain invoice details, set targets, give incentives, communicate interruptions, educate consumers on how to use water and electricity more effectively, and respond to queries.

The WRC study recommends a customer-centred approach to achieve compliance with the Consumer Protection Act, to turn the tide of public alienation. WRC is supported by international resource bodies, and the Bill and Melinda Gates Foundation.

• Service administration privatisation protest and dumping of prepaid meters in a labour protest was reported on Sheqafrica.com last year.
• Water use policy dialogue invitations and sessions, initiated by the WRC in 2012, were reported on Sheqafrica.com.
• The 2012 billing quality study, titled ‘Towards standards for municipal invoices in South Africa, Report TT 458’ by the WRC, is downloadable from the Water Research Commission website, or http://www.wrc.org.za/Pages/DisplayItem.aspx?ItemID=8762&FromURL=%2FPages%2FDefault.aspx%3F

PHOTO; Privatisation of state functions like services billing, rising costs and lowering quality, is linked to waste of resources, lowering trust, non-payment, and waves of public protest.

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