Salga to step up fight over Eskom debt matter
• Association says it will approach president over Eskom debt matter
The South African Local Government Association (Salga) has indicated that it would escalate the matter of its Eskom debts to President Jacob Zuma if ministerial interventions currently taking place, do not yield the desired results. Salga president and former executive mayor of Johannesburg Parks Tau said the association considered Eskom’s insistence on cutting off power to errant municipalities during talks as “inappropriate”.
The South African Local Government Association (Salga) has indicated that it would escalate the matter of its Eskom debts to President Jacob Zuma if ministerial interventions currently taking place do not yield the desired results.
Salga president and former executive mayor of Johannesburg Parks Tau said the association considered Eskom’s insistence on cutting off power to errant municipalities during talks as “inappropriate”.
Government ministers are meeting Salga’s national executive committee in a bid to find a solution to the payment problem. The ministers include Public Enterprises Minister Lynne Brown, Co-operative Governance and Traditional Affairs Minister Des van Rooyen and Energy Minister Tina Joematt-Pettersson.
The association is also seeking a review of the power utility’s credit control policies, which it says are inconsistent with those of municipalities. Salga estimates the debt owed to Eskom by municipalities stands at R9.6bn.
However, Eskom points to the slightly higher figure of R10.2bn. Municipalities have been subjected to scheduled power interruptions for weeks, after defaulting by councils on payments for electricity.
HOWEVER, ESKOM POINTS TO THE SLIGHTLY HIGHER FIGURE OF R10.2BN
Tau said Salga would soon meet with Zuma to discuss the municipal problems, including their debt to Eskom.
“It is concerning that cut-offs are taking place while we negotiate with Eskom on the matter. We believe that it is inappropriate for Eskom to do so. We have felt that we must escalate the matter to the highest level. If a whole town is switched off, we must worry. If ministers can help, well and good, but if not, we are forced to escalate the matter,” said Tau.
Eskom charged a rate of prime plus 5% interest to municipalities who pay later than 10 days after an invoice is issued, Tau said, which is far stricter than the interest municipalities charged their debtors 30 days after issuing an invoice.
This meant councils’ debt escalated faster than they could recover debts owed to them.
Eskom spokesman Khulu Phasiwe said the power utility was happy to discuss reviews of its credit control mechanisms to make it easier for municipalities to get on top of their finances.
“From our side, we are openminded on the issues pertaining to our customers and stakeholders. This affects them directly and if they would like to tweak or revise it, we are happy to hear where they are coming from,” he said.
Eskom had already agreed to write off the interest on debt that councils must pay for defaulting to Eskom, Phasiwe said. Municipalities had to take the first step towards initiating payment agreements with Eskom to take advantage of this interest incentive.
“If you handle your accounts in a good manner for three years in succession, then we are willing to waiver the interest on debt that you owe. For us, this is an incentive. Having the prime plus 5% rate removed means you only focus on the debt itself, because people are struggling to cover the debt as it is.”
Phasiwe said the last scheduled interruption of power due to debt failure was on January 12, in Naledi and Lekwa-Teemane local municipalities in the North West. Eskom was prepared to remind municipalities of the provisions the utility had made for them on the matter.