EC municipalities owe Eskom more than R530-million

Makana Municipality is third on the list of Eastern Cape municipalities that owe Eskom a combined R531m.

Makana’s debt to Eskom was R75.86m as at the end of June.

The biggest debtor is Walter Sisulu Municipality, which owes R134m, with Ray Mhlaba Municipality in second place with a debt of R88.67m.

A list of 25 municipalities in arrears with Eskom was released by finance, economic development, environmental affairs & tourism MEC Oscar Mabuyane, in response to a question in the legislature by DA MPL Bobby Stevenson, the shadow MEC for finance.

Of Makana’s debt, R54m was older than 90 days.

As for actions taken, Mabuyane said Makana had paid R24m on July 10, and arrangements had been made for payment instalments.

In a statement released last week, Stevenson said: “The Democratic Alliance believes that money paid to municipalities for electricity must be ring-fenced for Eskom, as well as the portion of equitable share that is used for electricity.

“If this does not happen, municipalities will only dig a deeper hole for themselves.”

In July 2017, the Concerned Citizens Committee to Save Makana, said the same thing when Makana’s debt to Eskom stood at R55m.

Concerned Citizens Committee chair Ron Weissenberg said at the time that Makana Municipality was using electricity income to pay staff salaries and service other debt, rather than pay Eskom.

“This is in violation of the constitution, the Municipal Finance Management Act and the common law,” Weissenberg said.

A council report from June 27 2017 showed that Makana collected R9,468,505 in income for electricity for the month of May, but of this paid only R750,000 to Eskom.

“The people in these affected municipalities are finding themselves facing increasing hardships, as they are squeezed by the mismanagement of their municipalities on the one hand, and increasing pressure from Eskom on the other. All of this in an economy that is shrinking,” Stevenson said.

“The ballooning debt owed to Eskom by municipalities in the Eastern Cape is a clear indication of the appalling mismanagement of funds by ANC-led municipalities.”

Outstanding fees owed to Eskom have almost tripled from the R186m reported two years ago.

Stevenson said Eskom’s strategy of cutting off the electricity of municipalities as a punitive measure, was likely to increase to combat Eskom’s own debt burden.

“This strategy could, however, cause businesses and industries to collapse in the affected