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Eskom declares dispute with Lesedi Local Municipality over R125 million debt

05.09.2021 Cape Town - substation are te back bone for transporting electricity municipalities

05.09.2021 Cape Town - substation are te back bone for transporting electricity municipalities

Published Jul 5, 2023


Johannesburg - After exhausting all avenues to recover what is owed to it, Eskom has declared a dispute against the Lesedi Local Municipality after failing to stick to its proposed plan to settle its bulging debt of more than R125 million.

Eskom spokesperson in Gauteng, Amanda Qithi, said the power utility had, in line with the Intergovernmental Relations Framework Act (Irfa), declared a dispute with the Lesedi Local Municipality located within the Sedibeng District to recover what the municipality owed it.

According to Qithi, the local municipality's debt stood as of June 30 at roughly R125m, which was from compounding debt dating back to June 2022, when the municipality started defaulting on its payments.

This comes after the municipality allegedly submitted a payment proposal to Eskom to settle the arrear debt, which Eskom has accepted on the condition that it continue to service its monthly current account.

Qithi said that despite this assurance, the municipality had defaulted on both the repayment and the current account by failing to settle the R20m invoice for April 2023, which was payable by May 29.

The municipality allegedly only paid R7m, while the May invoice of R21m, which was due on June 29, remained unpaid.

"Eskom has already issued the June invoice of R38m, and that is payable on July 27. Failure to service debt by Lesedi Local Municipality and other defaulting municipalities burdens the power utility's revenue streams, ultimately affecting service delivery."

Qithi said the delayed payment further put a strain on Eskom's finances and its ability to operate effectively.

The Star