Councils owing Eskom millions named and shamed

FOUR Western Cape municipalities are in debt with Eskom to the tune of R134.7 million.

Local Government, Environmental Affairs and Development Planning MEC Anton Bredell said the total debt over 90 days for these municipalities amounted to R134.7m for the period ending in January 2022.

Beaufort West owes R68m, Matzikama R82m, Cederberg R37m and Kannaland R35 million. According to the latest monthly report issued by Eskom, the total debt owed by Western Cape municipalities amounted to 3% of the total R41 billion municipal debt owed from around the country.

“Non-payment to Eskom is a symptom of a larger underlying problem facing local governments throughout the country: a culture of weak or no financial management.

“As such, my department is working on several initiatives to address this, and to provide the support needed to improve where necessary.

“… we have found some early warning indicators to identify potential signs of lacking financial management.

“One clear red light is when the price of basic municipal services starts to spiral out of control and cannot be justified in terms of value for money or economic realities of the specific community,” Bredell said.

He said the Department of Local Government, in collaboration with the Provincial Treasury, instituted preventative measures

“These measures include the regular monitoring of debt amounts owed by municipalities as well as ensuring the effective implementation of and adherence to signed payment arrangements between municipalities and Eskom to ensure that these arrangements are honoured,” said Bredell.

Matzikama mayor Johan van der Hoven said an arrangement with Eskom to get the arrears up to date had been put in place.

“A meeting was held with Eskom officials on March 17, 2022.

“In order to rescue the adverse financial position of the municipality, the newly elected council approved a financial recovery plan.

“The municipality is also receiving technical support from the Western Cape Department of Local Government.

“We are confident that the municipality will return to financial sustainability in the near future,” he said.

The Cederberg municipality said it had also entered into a payment agreement with Eskom since October 2020.

Municipal spokesperson Anthony Mlata said: “The municipality kept to the agreement ever since. The chief financial officer, Mbulelo Memani, further confirms that the debt shall be paid off by November 2022 or before.”

Acting municipal manager in the Kannaland municipality, Ian Avontuur, said the municipality inherited the debt from the previous council.

“We have reached an agreement with Eskom regarding the repayment structure of the debt, and we are committed to repay the debt owed to Eskom,” Avontuur said.

The Beaufort West municipality did not respond to questions by deadline.