REQUEST
FOR PUBLIC COMMENTS:
AMENDMENT
TO SERVICE LEVEL AGREEMENT
The escalating arrear
debt due to the Nelson Mandela Bay Municipality (NMBM) has resulted in the
appointment of EOH Mthombo (Pty) Ltd, specialists in the field of managing debt
collection and revenue enhancement, to curb the escalating arrears and identify
new revenue streams.
The service level
agreement (SLA) between NMBM and EOH Mthombo (Pty) Ltd was signed by the Acting
City Manager on 28 April 2016.
It should be noted
that during the procurement of this company, the "Pricing Schedule” clearly
stated that the award of the tender would be based on the rate tendered. Provisional
rates were supplied, as the NMBM could not at the point of preparing the tender
anticipate the possible monetary value relating to debt that could be collected
by the preferred bidder.
To this end, various
discussions were held to clarify the terms of the SLA concluded between NMBM
and EOH Mthombo (Pty) Ltd, which resulted in the following proposed amendments
to this agreement:
Proposed
amendments to the Service Level Agreement (SLA)
Addendum
1
Part 3 of Service
Agreement: Services - The Steering Committee on 2 August 2016 resolved:
Amendment of point 4:
Fees
4.1 MBD 3.2 Pricing
Schedule:
Delete: Variable
costing dependent on units, item 2: Rate per physical verification and
collection of data of each debtor (Approximately 350 000 debtor accounts) – R14.82
per debtor.
Amend:Variable
costing dependent on units, item 2: Rate per physical verification and
collection of data of each debtor meter – R7.41 per meter.
Note:All
amounts include VAT.
Addendum
2
The Steering
Committee on 23 June 2016 resolved that "….in terms of the SLA all debt in
excess of 120 days must be managed by EOH except for specific items identified
by NMBM and agreed to by EOH.”
In addition, the
following points are contained in the Addendum 2 to the Service Level Agreement
between NMBM and EOH Mthombo (Pty) Ltd:
"1. That up to 31 March 2016 the base
commission fee shall be calculated on 52 595 accounts that were handed
over to the Service Provider;
2. After 31 March 2016 the calculation of
the base commission fee will be based on cash received by the Customer in
respect of all debtors that were in arrears for 120 days and more, subject to
the agreed upon exclusions:
2.1 those debtors, as detailed in the addendum,
shall be excluded from the calculation for the base commission fee; and
2.2 all non-cash transactions on debtors’
accounts, such as ATTP, set-offs, write-offs and internal municipal accounts,
will be excluded from the calculation of the base commission fee, where there
are no cash receipts recorded.
3. The abovementioned exclusions shall fall
away after 30 September 2016 as they are once off concessions.”
Point 3 of the
Addendum 2 is under review with the service provider and will be amended at the
NMBM’s discretion. In addition, the necessary verification of commission paid
to the service provider will be conducted by Internal Audit.
Supply
Chain Management Implications
No supply chain
management implications could be established, as the contract scope has not
changed.
Financial
Implications
There are no
financial implications to Council based on the tender requirements, as the rate
of commission was approved.
Compliance
with MFMA Section 116(3)
To ensure compliance
with Section 116(3) of the MFMA, the NMBM is issuing this media notice
requesting comments on the proposed amendments to the above-mentioned contract.
The
local community is therefore invited to submit representations and comments to
the Municipality on its intention to amend the contract and proposed amendments
mentioned above.
For
more information, please contact Mr. Joel Swartz on tel. 041-506 5498 or email:
jswartz@mandelametro.gov.za
Representations
and comments must reach the email address jswartz@mandelametro,gov.za by
not later than 22 February 2017.
Ref. 23