Industrial Estate Authority   Debtors given grace period to settle arrears   |27 July 2022

Mr Collie and Ms Hollanda during the press conference

• 83% of small enterprise tenants, 27% of lessees of land in arrears

Businesses who are in arrears with the Industrial Estates Authority (IEA) with regard to their rentals have been given a one month period (from August 1 to 31, 2022) to settle their debts without being penalised.

The chief executive of IEA, Roy Collie, announced this penalty waiver period during a press conference yesterday at the IEA head office at Providence.

The aim of this exercise, he said, is to encourage tenants of locations and lessees of land who are in arrears with their rentals to come and settle their debts without fear of being penalised.

However, failure to pay their debts within this grace period will result in action being taken against them.

Before December 2020 the total amounted debt was slightly more than R28 million excluding penalty fees. The chief executive of IEA stated that last year when they launched the first penalty waiver campaign they had a lot of challenges in terms of how many people owed IEA and how much was owed to IEA.

He added that with the adjustment of the IEA’s staff members, recruitment of accountants, they were able to get their books in order.

“After last year’s campaign, in two months we successfully collected R8 million out of R28 million due. We also had a problem of constantly invoicing the tenants and we have managed to put this up to date and now monthly without fail the department of finance invoices all the tenants,” CEO Collie said.

The CEO noted that this year they still need to collect about R19 million in debt and he stressed that when a tenant does not pay this carries a 10% penalty fee. From August 1 until August 31 the IEA has decided to waive the penalty charge which is expected to relieve the clients to some extent.

CEO Collie urges all the tenants of IEA to seize this opportunity to pay their arrears.

He added that after the due date other actions will be taken against them.

He highlighted that after a third reminder the only option left to IEA is to start legal proceedings.

Julissa Hollanda, accountant at IEA, stated that as of June 30, 2022 there is an outstanding debt of around R19.61 million and this includes the 10% penalty that stands at R1.78 million. For rental of small to medium businesses the debt is R6.25 million and the debt for industrial land is R13.37 million.

She said that the waiver applies to all current IEA clients as well as those that have vacated the premises and are still paying their debts.

CEO Collie highlighted that it took the IEA a lot of time to put the accounts in order, about one year, with limited resources.

“At the beginning IEA did not have any human resource and we had the aid of the Ministry of Finance. But now that we have full time employees we have put many things up to date,” he stated.

The IEA CEO also stated that many clients have left and they still owe IEA and he further stressed that this will take even more time to find out who were they and what amount of debts they owe.

So far the IEA has reconciled that there are approximately R2 million in outstanding debts from people who have left the place.

He took the opportunity to urge those people to come forward and discuss a repayment plan with IEA as after the grace period IEA will have to take legal action.

Currently there are 527 plots of land under IEA, more than 3000 businesses operating on IEA land and 115 individuals renting out the small enterprises.

About 600 clients need to repay their debts.

The CEO of IEA stated that previously the prices per square metre for land varied from R30 to R50. He added that individuals had the option to pay once per year, two times per year or monthly.

For the enterprises prices varied from R4000 to R9500 based on size. For these types of businesses they are invoiced monthly.

The IEA has collected R12.8 million up to now in terms of monthly revenue.

“Our objective is to reduce the ‘old’ debt and in 2020-2021 we collected R10 million on the old debt 2020,” said the CEO.

He added that this year the IEA has collected almost R5 million.

So far 79 small enterprise tenants or 83% have not paid their debts and out of 527 plots of land 143 (or 27%) have not been paying their debts before 2022.

Eighty-nine plots of land are undeveloped, breaching the lease agreement to develop the land within two years.

Individuals that have not developed the allocated lands will have to hand it back to the IEA.

“Debt remaining from before 2020 is about R13 to R14 million,” said Mr Collie.

CEO Collie stated that some lessees have already stepped forward to say they cannot develop the land and the procedure to bring it back to the government is underway.

After the August 31 deadline the penalty fee will be reinstated and the clients will either have to engage in a repayment plan with IEA or further action will be taken against them.

Marla Simeon