African power utilities owe Eskom more than R600m in outstanding payments
Politics / 7 November 2019, 1:08pm / MAYIBONGWE MAQHINA
* This story has been updated
Johannesburg - Public Enterprise Minister Pravin Gordhan has said Eskom was owed R632 million as at September by three state-owned power utilities in the SADC region.
Gordhan revealed this in a written response to a parliamentary question from DA MP Denis Joseph, who wanted to know the number of international governments and private companies Eskom provided with electricity and the amount they owed.
Joseph had also wanted to know the implications of the outstanding payments and measures to make them pay up.
In his written reply, Gordhan said Eskom provide electricity to 10 governments and private companies.
"As at 19 September 2019, the total amount of outstanding payments to Eskom by the respective clients is R632 million."
He said Zambia Electricity Supply Corporation (ZESCO) owed R89 million, Electricidade de Mocambique R221 million and the Zimbabwe Electricity Supply Authority (ZESA) R322 million.
The minister said Zimbabwe has economic challenges due to political challenges which have led to it being unable to honour its debt obligations.
"Eskom and ZESA currently have a payment plan agreement for the settlement of the debt and ZESA is paying off the debt as per the agreement."
Gordhan also said Electricidade de Mocambique, which Eskom supplied with standby power, has financial constraints due to their generation mix which includes independent power producers which were contracted on a take-or-pay basis.
He added that ZESCO owed Eskom due to power supplied during the previous drought period. "The country has economic challenges which have led to it being unable to honour its debt obligations," he said.
Gordhan also said Eskom owed ZESCO for energy imbalance which arose out of managing the regional system.
"Eskom and ZESCO are currently concluding a payment plan agreement for the settlement of the debt," he said.
Gordhan stated that all the monies owed to Eskom were not in dispute.
"Eskom’s clients acknowledge their debt and attribute economic challenges as well as financial constraints as the cause of their delays in settling the outstanding debt."
Responding to a question on implications of the debts to Eskom, Gordhan said the funds funds could assist minimally with Eskom’s cash flows.
In his response to a question on payment solutions to be implemented against the clients, he said Eskom would ensure that future contracts were designed to avoid build-up of debt in the future.
DA chief whip Natasha Mazzone said while Gordhan might think R632 million wudl have a minimal impact on Eskom’s cash flow, the reality was that every cent counted when the power utility has a mountain of debt in the area of more than R420 billion.
"Half a billion rand is an astonishing amount of money and could, in the long term, go a long way in stabilising the financial woes at Eskom," Mazzone said.
She said her party has written to Gordhan to request that he make public the payment plans for Eskom's clients.
"The public needs surety that Eskom and indeed National Government is truly doing the necessary work to ensure that these outstanding debts are being collected."
Mazzone noted with concern that Eskom was incapable of collecting debts both at home and abroad.
"This begs the question, does Eskom actually have plans in place to collect debts owed to it? If not, the utility will never be able to stabilise its cash flow, and the taxpayer will continue to pay for bailout after bailout."
She charged that it was inconceivable that Eskom was willing to hold South Africans to ransom with the burden of rolling blackouts while it was supplying electricity to foreign governments who were not even paying for it.
"With the threat of rolling blackouts ever present, Eskom should first meet its obligations here at home before it can ever think of overextending itself through power supplies to other countries."