Eskom has, in line with the Intergovernmental Relations Framework Act (IRFA) declared a dispute with the Lesedi Local Municipality (LLM) after exhausting all avenues to recover what the municipality owes.
The local municipality’s current debt owed to Eskom is R125m as of June 30, 2023.
This is compounding debt from June 2022 when the municipality started to default on its payments.
In January 2023, Lesedi submitted a payment proposal to Eskom to settle the arrear debt, which Eskom accepted on the condition that it would continue to service its monthly current account.
However, the municipality defaulted on both the repayment and the current account by failing to settle the April 2023 invoice of R20m that was payable on May 29, 2023, and only paid R7m. The May 2023 invoice of R21m, which was due on June 29, 2023, remains unpaid.
Eskom has issued the June 2023 invoice of R38m and that is payable on July 27, 2023.
Failure to service debt by Lesedi Local Municipality and other defaulting municipalities burdens the power utility’s revenue streams, ultimately affecting service delivery.
This further puts a strain on Eskom’s finances and its ability to operate effectively.
