Municipality pays back R160m of R595m owed to Eskom

The City of Mombela Local Municipality (CMLM) has paid the first instalment on a payment plan to settle its arrears with Eskom, according to an agreement they had with the energy supplier.

Instead of the R140 million they had to pay last week, they paid R160 million, according to Mbombela municipal spokesperson, Joseph Ngala.

But the local authority is not out of the woods yet. Mbombela owed Eskom a total of R595 million at the end of October this year and had arranged a payment plan according to which they would pay off the debt in three instalments, of which the R140 million that was due last week was the first.

Ngala confirmed last week that Eskom would be paid R140 million by Friday.

However, on Monday there were indications from sources that the municipality had not paid Eskom, but that Mbombela would be paying the company later in the week.

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Responding to questions surrounding the Eskom payment, Ngala did not say whether the payment was made last Friday, but said Eskom had been paid.

“The city recently paid Eskom R160 million, R20 million more than the initial agreement as proof of its commitment to honour its payment obligations,” Ngala said.

Eskom had indicated to Lowvelder on Tuesday afternoon that a media response regarding the municipality’s payment was in the process of being approved by head office and that it would be sent out shortly.

However, on Wednesday morning, Eskom spokesperson, Juanita Vogel, said Eskom management had decided that they had answered all the questions they could in a previous response and referred all queries to the municipality.

DA councillor Sanley van der Merwe said it was “worrying” that Eskom could not confirm whether or not the municipality had paid the amount on time.

“The municipality’s administration has not been forthcoming with information to council regarding financial documents. We are as much in the dark as everyone else, but we are following up on all of this,” she said.

“We have received no communication or proof of payment to Eskom up until now.”

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Van der Merwe said it was also strange that the municipality had not announced a closing ceremony for council like they usually do every year.

“It is concerning as we should have had one by now.”

Kruger and Partners Inc. (Nelspruit), Johan du Preez, said although the municipality had said the amount was paid, it is still “extremely concerning” that such a high amount of debt had been accrued.

“The municipality has had a history with non-payments and massive debts. If the municipality’s financial management is not rectified soon, I fear we may see the municipality under administration.”

Lowvelder reported last week that according to the City’s budget report, the municipality owed R1,5 billion in trade payables at the end of October.

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.

This article was republished from Lowvelder with permission 

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