Ulundi, Eskom at loggerheads over millions

KwaZulu-Natal Finance MEC, Belinda Scott.

KwaZulu-Natal Finance MEC, Belinda Scott.

Published Jun 28, 2016

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Durban - Ulundi Municipality and Eskom are embroiled in a row over outstanding debt, with each claiming the other owes it millions of rands.

According to Eskom, Ulundi is in arrears to the tune of R41 million for electricity bought up until December, while the municipality claims Eskom owes it R101 million for using its infrastructure to distribute electricity.

The dispute was thrust into the limelight when Finance MEC, Belinda Scott, tabled a report in the KwaZulu-Natal legislature last week, showing the state of finances of municipalities in the province.

Scott informed MPLs that her department had established a task team to provide support to the municipality in an apparent effort to stop the town’s electricity being cut.

The municipality had apparently defaulted on its repayment plan in June, July and September last year.

Following an intervention by the provincial Treasury, a repayment plan had been reached whereby Eskom would stop charging interest on Ulundi’s debt and the Treasury would monitor repayments.

But Godfrey Zulu, Ulundi municipal manager, has responded angrily to claims that the municipality owed money and was being rescued by the provincial Treasury, which was assisting it to pay its debt.

Zulu said Eskom owed Ulundi R101m and that the power utility had deducted an offset payment of R27m in May.

“Eskom remains indebted to the municipality for the difference,” he said.

Zulu said the Eskom’s debt to the municipality arose from a “wheeling contract”, for using its infrastructure to supply electricity to its consumers since the 1990s.

He said the two institutions have been trying to resolve the matter since 2012, but the process had been delayed and the amount owing had yet to be determined.

The provincial Treasury subsequently intervened in an effort to resolve the matter.

“At the last meeting, held on Monday, May 9, 2016, it was accepted by the Eskom delegation that an amount of R30 317 713 be written off by Eskom for the interim until the final figures are agreed upon,” Zulu said.

Zulu said they had exhausted all avenues trying to get Eskom pay up.

“The municipality is considering legal action, which in terms of the Constitution, ought to be a last resort,” he said.

Eskom spokesman, Khulu Pasiya, initially told the Daily News they would not discuss their dispute in the media, but he hastened to say the municipality ought to raise its concerns through proper platforms.

In a subsequent statement responding to specific question, Eskom said it did not owe the Ulundi municipality any money for electricity wheeling.

“As far as Eskom is concerned, Ulundi is owing Eskom and there is a proposed engagement to resolve the wheeling matter together with the outstanding debt.

“The KwaZulu-Natal pro-vincial government is facilitating the discussions on this matter, and we’re hopeful that an amicable resolution will be found soon.”

The statement also said that the Ulundi municipality was presently only servicing its current debt and not the historical debt (arrears).”

Eskom flatly denied there was an agreement to write off the municipal debt, as claimed by Zulu.

“There is no agreement in place between Eskom and the municipality to write off that debt.

“Eskom will not disclose how much Ulundi is in arrears by because our company policy does not allow disclosing customer accounts to third parties,” the statement said.

Daily News

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