KwaDukuza municipality (KDM) is owed more than R200 million in outstanding debt by individual and business ratepayers (for electricity and other services), refuting a report that the municipality owes Eskom more than R100 million.
In the article by The Daily Maverick ‘Eskom threatens to disconnect power to a third of municipalities in bid to claw back R31 billion‘ (November 16) it was said that KDM owed Eskom R100 million.
The municipality has denied this claim.
The bulk of outstanding debt to KDM comes from defaulters living in Ballito.
According to the first quarter budget report for the 20/21 financial year, KDM offered incentives to collect the outstanding debt, which included making payments more affordable over a period and stretching the payment period from 15 to 30 days.
Despite these debt relief measures, thousands of households across the North Coast are battling to pay for municipal services as a result of the widespread economic havoc wrought by the coronavirus.
KDM is one of many municipalities that act as intermediaries, buying electricity from Eskom and then re-selling it to their customers.
The sharp declines in revenue has cut deeply into municipal finances.
Last month a High Court ruling paved the way for Eskom to cut off the supply of electricity to delinquent municipalities.
Minister of Public Enterprises Pravin Gordhan said the total debt owed by municipalities to Eskom as at 31 July is R46.1 billion – of which R31 billion is overdue debt.
KDM’s current account with the power utility is R105 million with zero days overdue while Ilembe District municipality’s debt of R1.6 million is 16 to 30 days overdue.
DA Caucus leader Madhun Sing said in the last 4 months KDM had experienced almost R100 million decrease in revenue.
The pandemic was blamed for the revenue loss however in the first quarter 2020/21 budget the situation had normalised with a 92% collection rate recorded.
“The KDM Eskom account is up to date. According to October’s finance portfolio committee report an amount of R64 million was paid to Eskom.
However, if difficulties are being experienced then exco must be informed. Of grave concern is the first quarter debtors, which is sitting at R274 million.
Illegal electricity connections and debtors are adding to the woes of council.
Council should cut all frills in line with cost containment measures and focus on service delivery with the tight budget they have.”
Last week Eskom published its results for the financial year ended March 2020, showing a net loss after tax of R20.5 billion, despite revenue of R200 billion.
KDM spokesperson Sipho Mkhize confirmed the municipality’s account with Eskom was not overdue.
Correction: The original article headline ‘KwaDukuza municipality owed more than R200 million in electricity’ was changed to ‘KwaDukuza municipality owed more than R200 million by ratepayers’. The article stated that KwaDukuza municipality was owed more than R200 million in outstanding electricity debt, when R200 million is the total debt owed to the municipality.
