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#EskomDebtors: 59 municipalities owe the power utility

Business Report

A number of municipalities have not kept up with the arrangements to pay Eskom.

According to Des van Rooyen, Minister of Cooperative Governance and Traditional Affairs (TUE): a total of 59 Municipalities in Nine provinces owed R8.2 billion to the power utility.

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Van Rooyen said the municipalities had defaulted the payment arrangements with Eskom. Municipalities in the Free State, Mpumalanga and North West owed the most.

In the Free State, municipalities owed Eskom R3.6bn, followed by Mpumalanga with R2.2bn and North West with R780 million.

 

In Gauteng, municipalities owe Eskom R508m, KwaZulu-Natal R6m and Western Cape R11m. In the Northern Cape, municipalities owe the power utility R465m. In the Eastern Cape they owe R328m and in Limpopo the debt was R287m. The government had set up a task team which had identified the municipalities failure to honour their agreements.

The task team had found that the problems were financial, technical and legislative. Van Rooyen said in a written Parliamentary reply municipalities that had a responsibility to provide basic services to their communities.

 

During his budget vote two weeks ago in Parliament, he said that some of the municipalities had entered into arrangements with Eskom without being realistic about their financials.

He said the municipalities wanted to pay the debt from the conditional grants.Van Rooyen said if municipalities had financial problems provincial MECs have a constitutional obligation to come up with measures to improve their finances.

 

“Section 139 (5) states that if a municipality, in a financial crisis, breaches its obligation to provide basic services or admits that it is unable to meet its financial commitments, the relevant provincial executive authority must impose a financial recovery plan,” Van Rooyen said.

 

According to Van Rooyen, Municipalities have been battling over the last few years with former Cooperative Governance Minister Pravin Gordhan merging some of the unviable municipalities.

“Before he was fired as Finance Minister Gordhan had also called for municipalities to generate their own revenue to remain sustainable.”


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