Eskom renew municipal debt deal

CO-OPERATIVE Governance and Traditional Affairs Minister Des van Rooyen says he is in discussions with premiers, provincial MECs and mayors to break the deadlock on the R8.2 billion owed by municipalities to Eskom.

He said the debt owed by 59 municipalities that had defaulted after previous agreements to pay now needs to be brought down.

In a written parliamentary reply yesterday, Van Rooyen said they had managed to reach some agreements with provincial leaders and mayors on the debt.

“In holding municipalities accountable, the Department of Co-operative Governance and Traditional Affairs as part of the Inter-Ministerial task team on Eskom debt, has been in discussion with premiers, MECs and mayors,” said Van Rooyen.

They reached an agreement with Eskom that it would cut the interest rate charged to municipalities from 5% to 2.5% plus prime.

The power utility would consider reviewing charging interest after 15 days instead of 30 days, in line with the law.

When municipalities start paying, the money would go straight to the actual debt rather than into the interest, said Van Rooyen.

He said the number of municipalities which had entered into agreements with Eskom had increased from 24 last year to 54.

“The inter-ministerial task team is in the process of resolving the legislative matters on electricity reticulation between Eskom and municipalities,” said Van Rooyen.

He said out of the total of R8.2bn owed by municipalities, the Free State had the biggest debt of R3.6bn against Eskom.

In the Free State, two municipalities had the largest debt – more than R1bn each.

Maluti-a-Phofung municipality, owed Eskom R1.6bn and Matjhabeng owed the power utility R1.2bn.

The other municipalities in the province had debts of R124 000 and less. The Free State was followed by Mpumalanga, which was owing Eskom R2.2bn. Emalahleni had the largest debt of R937 million, with Thaba Chweu owing R364m. In the North West, municipalities there owed Eskom a total of R780m.

In Gauteng, debt was sitting at R508m with Randfontein having the largest debt of R149m followed by Mogale City, which owed R127m.

In the Northern Cape, the debt was sitting at R465m followed by the Eastern Cape at R328m, Limpopo R287m, Western Cape R11m and KwaZulu-Natal R6m.

Only two municipalities, eDumbe and Mpofana, owe R2.6m and R3.4m respectively.

In the Western Cape, only Kannaland was in arrears. It owes Eskom R11m.