New panel to look into legality of councils repaying Eskom
MP Kevin Mileham says municipalities are never going to be in a position to repay Eskom all their debt plus interest and the utility must write off debt that cannot be recovered. It is back to the drawing board for the interministerial task team that was set up to resolve municipalities’ historical debt owed to Eskom and electricity reticulation, with a December 15 deadline set to establish a special panel that will look at the legalities of the issues, MPs heard on Tuesday.
The task team comprises the ministers of co-operative governance, finance and public enterprises and the South African Local Government Association (Salga). It is chaired by the cooperative governance minister.
In 2015, the Treasury withheld municipalities’ equitable share of the budget in the absence of repayment agreements for their Eskom debt.
Salga declared a dispute and invoked the Constitution, in terms of which municipalities are mandated as the distribution agents for electricity to residents, as well as the custodians of reticulation infrastructure.
A delegation from the task team, which included Department of Co-operative Governance director-general Tebogo Motlashuping, was on Tuesday sent packing by MPs after failing to come up with adequate responses to their questions about progress made and milestones reached.
Municipalities owe Eskom R10.1bn but have bemoaned the interest charged on their bulk accounts, saying this is an impediment to their making any meaningful dent in their debt. Councils, in turn, are owed R117bn by costumers including households and the state.
Motlashuping told a joint meeting of the energy and cooperative governance portfolio committees that the interministerial task team had agreed on establishing the special panel in a bid to tackle the issues.
The minister, Des van Rooyen, “has consulted with Salga ... and advised that the panel will be established before December 15”, he said.
DA MP Kevin Mileham said the composition of the panel should be carefully considered.
“The issue with municipal debt to Eskom is that municipalities are never going to be in a position to repay all of this debt plus interest. The board [of Eskom] needs to take some hard decisions and write off debt that cannot be recovered,” he added.
Co-operative governance minister Van Rooyen should also take action in terms of sections 139 and 139 (1) of the Constitution to allow national government intervention as political will was lacking, said the MP.
ANC MP Amos Masondo said: “Some of these matters have been discussed over years and this meeting is not helping us make any progress. We need ministers to come forward as well to tell us where they are on resolving these matters.”