Payment deadline for Eskom account looming

It is believed that Eskom will switch off the municipality’s power if the amount is not paid.

CMLM’s spokesperson, Joseph Ngala, said it would pay the electricity giant the R140 million debt tomorrow, preventing the power from being disconnected.

“We have the funds to pay,” Ngala said.

The payment will form part of a payment plan that the municipality has negotiated with Eskom to pay off its account with the electricity supplier.

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This follows CMLM’s annual budget report, which Lowvelder has seen, for October that showed the municipality owed R588 million to Eskom at the end of that month.

Ngala did not respond when asked how much CMLM currently owes the power utility.

According to the City’s budget report, the municipality owed R1,5 billion in trade payables at the end of October, reflecting an improvement of R500 million from the R2 billion that was stated in the 2019/20 unaudited financial statements.

The report stated that apart from owing Eskom R588 million at the end of October, it also owed R466 million to the Department of Community Safety, Security and Liaison, R143 million to the Department of Water Affairs and R263 million to trade creditors.

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However, CMLM is also owed millions of rand by households and businesses across the municipality.

The budget report showed that R153 million is owed by organs of state to CMLM, while households owed R381 million and business and others owed R255 million.

In October 2017, Lowvelder reported that Eskom announced that it would cut the power to CMLM due to an outstanding debt of R150 million.

The municipality had owed the amount from September 2016.

Eskom had sent out a notice at the time stating: “The City of Mbombela Local Municipality’s breach of its payment obligation to Eskom undermines and places in jeopardy its ability to continue the national supply of electricity on a financially sustainable basis”.

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Eskom’s Juanita Vogel said there are no plans to cut the electricity to the CMLM before Friday.

“Eskom follows a process of Promotion of Administrative Justice Act (PAJA) before it can interrupt, terminate or restrict electricity supply for any municipality in debt,” said Vogel.

“The PAJA process involves notifying all affected stakeholders of the intention to interrupt supply and allow them an opportunity to comment or submit objections. Eskom has not advertised such a process at this stage, and there is no plan to do this before Friday December 11,” she said.

Vogel added that the total amount owed to the electricity giant by the municipality as of the end of October was R595 million.

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She said CMLM provided Eskom with a written commitment letter to settle the arrear debt which it found acceptable, however, she said Eskom requested council resolution support in October, which is still outstanding. 

“Eskom is currently not in litigation with the municipality and they do pay their current accounts. Once council resolution is received we will be able to conclude on the repayment plan for the arrear debt,” said Vogel.