Govan Mbeki municipality owes billions to Eskom, Rand Water – report

The heavily indebted Govan Mbeki municipality has been summoned by the DA in Mpumalanga to urgently present an action plan on how to they plan to pay their ballooning Eskom account. 

The party has written to Cooperative Governance and Traditional Affairs (Cogta) MEC Busisiwe Shiba to summon the municipality’s plan, specifically on how they are going to improve revenue generation, Ridge Times reports. 

According to the DA, Eskom debt within the municipality has escalated exponentially over the past few years. 

“For October 2021, Govan Mbeki Municipality owed their creditors more than R3 billion, and this is made up of R2.6 billion being owed to Eskom and R439 million being owed to Rand Water,” DA MPL and provincial deputy leader Trudie Grové-Morgan told the publication. 

ALSO READ: Eskom says City of Tshwane owes it R635m

“The exponential increases in the debt to external entities can never be acceptable because it is the large debt and the exorbitant interest, which inevitably leads to much needed service delivery being diminished to a point where no services can be rendered.”

Grové-Morgan said the section 71 report revealed Govan Mbeki municipality had a payment rate of 58%, and that R2.7 billion was owed to the municipality for services provided. 

“The information provided reiterates that the financial spiral in which this municipality is, is due to an inability to capitalise on services provided because of high distribution losses and because of incorrect revenue generation strategies.”

She said the DA had to intervene to summon the municipality to present detailed plans to Cogta on how it plans on improving revenue generation, and its subsequent payment to Eskom. 

Edited by Nica Richards

This article first appeared on Caxton publication Ridge Times’ website, by Mphikeleli Masangu. Read the original article here.