ELM has applied to Treasury for relief on its mammoth Eskom debt, Vaalweekblad has learned from reliable sources.
But it is not yet known whether the entire amount or only part of it has been applied for or even yet been approved.
ELM has not yet formally reacted to enquiries on the issue.
Eskom is not involved in the process of debt relief application by municipalities – however, Treasury states in its debt relief policy guidelines that Eskom should write off all municipal debt over three years but under strict revenue generation conditions applicable to municipalities.
Core to this Treasury approach is smart metering and changing the deeply-rooted culture of non-payment at municipalities such as ELM, where businesses and residents still owe as much as R5 billion or more to the local authority over the passing years.
The Treasury debt relief applied for by ELM also does not apply to its Rand Water debt, but it is known that intensive but cordial negotiations have in recent months been ongoing between the two parties on the R1,4 billion owed to the bulk water utility.
Unlike Eskom, Rand Water did not seize ELM funding earmarked for service delivery in 2023.
According to Treasury Municipal Debt Relief policy guidelines, debt relief applications on Eskom are conditional and also depend on municipalities making extensive use of pre-paid smart meters and other steps to address the culture of non-payment in communities.
“The National Treasury will continue to implement municipal revenue enhancement initiatives including a transversal tender for a smart pre-paid meter solution to change to a forward-looking culture of payment …” the Treasury Debt Relief Policy states.
ELM has already positioned itself favourably with probably the most highly advanced smart meter programme in Gauteng, run by BXC, which is already busy extending new installations in Emfuleni after reactivating thousands of smart meters from a previous halted programme.
The smart meter programmes of both Tshwane and Johannesburg Metros have collapsed due to mismanagement by other service providers.
Smart meters are seen as the most effective manner for municipalities to ensure sustainable revenue generation and security whilst simultaneously empowering consumers to manage their accounts without the pitfalls and corruption of traditional paper billing mechanisms.
But although smart meters have been widely welcomed by many businesses and residents, fierce resistance to installations have taken place in some areas in the past by mafias and communities who are not accustomed to pay for electricity but extensively use illegal connections.
Electricity sales form the bulk of ELM revenues as with most municipalities throughout South Africa.
Treasury guidelines also demand effective mechanisms to resolve non-payment disputes , including a dispute ombud mechanism, which ELM is known to be working on.
