Municipalities’ debt to Eskom increases by R5 billion in just four months, says Mabuza

ANC Deputy President, DD Mabuza has revealed that municipalities’ debt in the country to power utility Eskom has increased from R44.8 billion to R49.1 billion in a space of four months (March – July).

Mabuza released these figures on Thursday, during a session in the National Council of Provinces while announcing Eskom’s debt recovery plan.

“This is not a desirable state of affairs for both Eskom and municipalities. That is why Eskom forms part of the multi-disciplinary revenue committee, which is meant to address challenges related to the payment of debts owed to Eskom by municipalities and organs of state,” said Mabuza.

“The committee’s main task is to improve revenue collection and the strengthening of partnerships with various stakeholders, in order to improve payment levels of indebted municipalities. These efforts include the implementation of the Eskom active partnering programme by defaulting municipalities.”

Mabuza said that through the initiative, municipalities could easily join forces to discuss matters pertaining to their businesses and challenges they were experiencing in a secure environment, ensure sustainability of electricity infrastructure, and the upscaling of municipality’s technical expertise.

 According to him, the programme’s holistic focus enables municipalities to rebound financially and carry out their constitutional obligations to provide their customers with more dependable electricity.

“Through this programme, municipalities benefit from securing their revenue stream and are able to pay for their large-scale electricity purchases from Eskom.

“Eskom’s responsibility in this model is to assist municipalities by presenting them with a customised solution to handle their unique challenges.”

He further highlighted that the partnerships’ joint efforts were intended to increase the consistency and security of consumers’ access to electricity, while guaranteeing that the proper tariffs are applied, and that there is implementation of more robust control measures to promote sustainable economic recovery.

“Due to the rapid growth and quantum of the balance, Eskom is collaborating with the National Treasury on structuring solutions to assist with the collection of municipal arrear debt and manage the payment of municipalities’ current accounts in order to prevent any further growth in arrear debt.”

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