Eskom, in its newsletter, has published an appraisal for AbaQulusi Local Municipality for honouring its electricity debt. In the newsletter, Eskom indicated that, “Although a few municipalities in the KwaZulu-Natal Operating Unit (KZNOU) deserve praise for their efforts in honouring their commitments, AbaQulusi Local Municipality is probably head and shoulders above the rest. The municipality has been excellent in prioritising their debts to Eskom in the face of financial distress”. It further cited that, “In 2018, the municipality defaulted on its obligation to Eskom on many occasions, resulting in the establishment of a payment arrangement. As at January 2018, the municipality owed Eskom R36 million and by October 2018, this had climbed to over R50 million. Later in 2018, Eskom and the municipality entered into a new payment arrangement. The municipality made significant progress, reducing their bulk debt of R41 million in September 2018 to R13 million in November 2018”. Also read: ALM pays off R197 million historical debt However, according to Eskom, the municipality defaulted again and by July 2019, the municipality owed Eskom R43 million, of which approximately R30 million was overdue. “By 2019, after several administrators had tried to turn the municipality around and failed, a new administrator approached Eskom. This administrator came with an impressive record after successfully settling the municipal debt of another struggling municipality in the province and had a very good working relationship with Eskom management. After intense discussions, the parties concluded a new payment arrangement in April 2019 – the debt was over R52 million at the time, and close to R42 million of it was overdue debt. “The AbaQulusi matter should serve as an inspiration, not only for Eskom in its unceasingly intense efforts to reduce municipal debt, but also for the many local government entities that are on the wrong side of Eskom’s books. It will be crucial, as we fight on as an organisation, to reflect on our success and allow ourselves to be inspired by the work we continue to put in towards ultimately eliminating municipal debt,” stated Eskom. Municipal Manager Bonga Ntanzi said that, “Being praised by Eskom as a municipality shows us that we are on the right path in ensuring that we run a financially stable municipality. Our last payment to Eskom is going to be on December 4 this year. This means we will be celebrating this festive season, knowing we have paid off the historical Eskom debt”. He assured that the outstanding balance of R8 million, which is for November and December, will be paid in full on December 4. The Eskom debt was one of a number of reasons that led to intervention into the municipality by the Department of Co-operative Governance & Traditional Affairs (CoGTA).
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