‘Culture of payment is needed in country’
THE 10 municipalities, which between them owe Eskom billions of rands, are drowning in a debt trap from which it is almost impossible to escape.
Disclosing this at a standing committee on public accounts sitting yesterday, Cooperative Governance and Traditional Affairs Minister Zweli Mkhize said that a constitutional amendment might have to be made to delineate the boundaries between Eskom and municipalities.
He talked about the influence of the culture of non-payment, saying the government would have to start a campaign to promote a culture of paying.
Without naming prepaid electricity meters, he said that consideration was being given to having consumers buying electricity directly.
By December last year, Eskom was owed a total of R23bn, he said.
“Having looked at that kind of debt we found that 70% of debt comes from 10 municipalities, 40% comes from municipalities in the Free State. The nature of the debt indicates to us that Eskom has committed to discontinuing power in some areas that affects industry.”
The government understood the sensitivities with which Eskom has had to try and move with this matter. “On the other hand we understand the various challenges faced by municipalities.
“In general terms, municipalities are struggling. There are many municipalities that are structurally unviable.
“When we talk about Eskom and the water board they’re not the only ones owed money by municipalities. There are a lot of others.”
There was also the issue of non-payment with a total of R139bn owed to all municipalities by communities, the private sector and government departments.
Electricity payments formed between 50% and 60% of the income of municipalities. “We’ve got to find ways to protect these sources of revenue.”
He said there was tension between Eskom and the municipalities over who should pay revenue and where.
“When people are not paying, when municipalities are not paying sufficiently, Eskom has approached the clients directly. So the tension has risen. Eskom says we are not pirating we are doing our mandate here. We need to sort out the mandate.”
The government, he said, would have to embark on a huge campaign to promote a culture of payment.
On the work of an interministerial task team, (IMTT) he said municipalities were concerned that Eskom was undermining their constitutional authority. “They see Eskom as a service provider, which should provide a service (electricity reticulation) on behalf of a municipality.”
However, Eskom was providing this service as a public company on the strength of a licence issued by the National Energy Regulator of South Africa. “This difference of views has created tension between Eskom and municipalities.”
Mhkize said that a solution had to be found by an advisory panel formed by the IMTT. “The team must bring us closer to a constitutional and legal mandate. We need to make a political decision to redefine the mandate of the two. Rather than being sorted out by the courts, it must be settled by the government.”