Power utility Eskom has called on a Gauteng municipality to pay its debt owed of R125 million.
The ailing state-owned entity said it has declared a dispute with the Lesedi Local Municipality in line with the Intergovernmental Relations Framework Act (IRFA).
Eskom’s spokesperson in Gauteng, Amanda Qithi said the power utility has exhausted all avenues to recover what the municipality owes.
“The local municipality’s current debt owed to Eskom is R125 million as of June 30, 2023. This is compounding debt from June 2022 when the municipality started to default on its payments.
“In January 2023, Lesedi submitted a payment proposal to Eskom to settle the arrears debt, which Eskom accepted on the condition that it would continue to service its monthly current account,” Qithi said.
But, she said the municipality defaulted on both the repayment and the current account by failing to settle its April 2023 invoice of R20 million that was due May 29, 2023, instead it only paid R7 million.
“The May 2023 invoice of R21 million which was due on June 29, 2023, remains unpaid. Eskom has issued the June 2023 invoice of R38 million and that is payable on July 27, 2023,” Qithi said.
She said the failure of municipalities to service their debt ultimately affects service delivery.
“Failure to service debt by Lesedi Local Municipality and other defaulting municipalities burdens the power utility’s revenue streams, ultimately affecting service delivery. This further puts a strain on Eskom's finances and its ability to operate effectively,” Qithi said.