Salga says municipal debt talks a success
• Some local councils still unable to meet their electricity repayment obligations
The South African Local Government Association (Salga) has cited debtrepayment talks with Eskom on behalf of municipalities as one of its successes in 2016-17, in its latest annual report.
Debt-repayment talks with Eskom on behalf of municipalities have been cited as one of the successes of the South African Local Government Association (Salga) in its annual report tabled in Parliament.
Eskom is owed billions in unpaid power bills by local councils, most of which are in financial distress. The power utility has used scheduled electricity cuts as a bargaining chip and as a means to get municipalities to the negotiating table to settle their debts.
Salga said in its report for the 2016-17 financial year that in an effort to seek resolution to the municipal debt-repayment crisis, it had convened a forum with Eskom, the Department of Co-operative Governance and Traditional Affairs and the National Energy Regulator of SA (Nersa).
Further meetings between Eskom and the various stakeholders were held to discuss the historical debts owed to and by municipalities, as well as key structural and technical issues that worsened municipal debt, Salga said.
However, the outstanding debt situation remains dire in some cases, with municipalities unable to meet their power repayment obligations.
This was apparent two weeks ago, when Eskom was on the brink of switching off the power supply to councils in North West province. The power utility decided against this at the 11th hour.
Commenting on repayment arrangements, Ayanda Noah, Eskom’s group executive for customer services, said: “We hope that the municipalities will honour their commitments in order to ensure continuous supply of electricity. However, should they renege, we reserve the right to restart the interruptions without further notice.”
Municipalities are owed more than R120bn by households, businesses and government offices for services.
The Treasury said in a report on municipalities it needed to be acknowledged that not all of the outstanding debt of R128.4bn was realistically collectable, as this total included historic debt that had accumulated over an extended period — debt older than 90 days — interest on arrears and other recoveries.
If consumer debt was limited to below 90 days, then the realistically collectable amount was estimated at R24.9bn, the Treasury said.