Municipalities close to settling R9bn Eskom bill

The council also agreed to deal with the issue of 25 dysfunctional municipalities

MINISTER of Co-operative Governance Pravin Gordhan believes municipalities are on track to repair damaged relations with Eskom after a fallout over billions of rand owed to the power utility.

This had resulted in threats by Eskom to cut off the 50 municipalities who owed it R9 billion.

Gordhan told journalists at Tuynhuys yesterday, following a meeting of the Presidential Co-ordinating Council involving ministers, premiers and mayors, that municipalities who owed Eskom R9bn were on the verge of settling the amount.

He said municipalities had also raised their concerns with Eskom at the Presidential Coordinating Council meeting yesterday, but these would be discussed directly with Eskom.

In May, Eskom reached a settlement with 20 of the defaulting municipalities.

The National Treasury also threatened to withhold funds to municipalities who owed the power utility.

Gordhan said significant progress has been made in this environment as most of the municipalities had reached a settlement agreement with Eskom.

The minister also said the meeting touched on areas of improving infrastructure in municipalities.

“In the area of operations and maintenance of infrastructure, here it is to ensure municipalities don’t look at the new infrastructure, but maintaining the existing infrastructure,” said Gordhan.

The council also agreed to deal with the issue of 25 dysfunctional municipalities. Gordhan said this would be done in the next few months.

These municipalities were identified by Auditor-General Kimi Makwetu in his audit outcomes report last week.

Makwetu released the report in Parliament, where he noted areas of improvement but also areas of concern.

Yesterday, the cabinet applauded the increase in the number of municipalities that got clean audits.

The cabinet confirmed Gordhan’s statement that they would focus on 25 dysfunctional municipalities in the next few months.

“Of the 335 municipalities and entities audited, 102 improved, 194 remained constant, 27 regressed, while two were new and 10 were still outstanding.

“This reinforces more efficient and accountable basic service delivery in line with the ‘Back to Basics’ approach,” said the cabinet.

The cabinet added that while it would focus on 50 municipalities who did not get clean audits, it would give special attention to the 25 who had been receiving disclaimers over the past five years.

The cabinet also expressed concern on unqualified people employed in municipalities.

It said these people undermined good governance practices.

In its report tabled in Parliament two weeks ago, the finance watchdog, the Financial and Fiscal Commission (FFC), said that the greatest risk facing municipalities is the lack of skilled officials in key positions.

In the report, the FFC found that most of the provinces had acting municipal managers and acting chief financial officers.