Eskom debt: who’s next?
WHO’S NEXT: MUNICIPALITIES DON’T PAY, SO ESKOM CUTS FROM 6AM-8PM
Power utility is taking a tough stance against three municipalities who have defaulted on payments. The message was short and simple: pay up before next Wednesday, or suffer 14-hour daily power cuts until you do.
Nearly a million people could soon endure daily 14 hour-long blackouts if Eskom follows through with threats to cut three municipalities’ electricity due to non-payment.
The Free State municipalities Mangaung Metropolitan, Mafube and Mantsopa will soon stop receiving electricity from Eskom due to “the municipalities’ contravention of payment conditions”, Eskom said yesterday.
Cuts are expected to be implemented daily from 6am to 8pm. Residents will effectively be without power for 14 hours a day.
The Free State is the province with the highest Eskom debt bill, with municipalities collectively owing more than R9.8 billion.
Mangaung is the province’s biggest municipality, and includes the province’s capital, Bloemfontein, as well as Thaba Nchu and Botshabelo.
The province’s MEC for finance, Gadija Brown, recently placed the “highly financially distressed” Mafube and Mantsopa under administration.
Bloemfontein is similarly distressed, with Moody’s Investors Services in August downgrading it to three levels below junk status at grade B3.
At the time the municipality estimated its outstanding debts at R4 billion, with 36% owed to by government departments and businesses.
Eskom yesterday said the termination will be effective from December 3, if the municipalities refuse to settle their accounts.
“Eskom supplies electricity to the municipalities and has an obligation to perform these duties on a financially sustainable basis. The municipalities have a reciprocal duty to pay Eskom,” it said.
Energy expert Chris Yelland said it was easier for Eskom to cut off a municipality that it was to cut off individuals.
He said the municipalities were also struggling to collect money from consumers and those who had paid for their electricity would mostly probably approach the courts to stop Eskom.
“It is all a big game of threats, because Eskom has to threaten municipalities to pay. It would most certainly be cut off for a few hours a day to drive home the message,” Yelland said.
Eskom said in order to “minimise the hardship to consumers”, it will withhold its electricity supply services in a regulated pattern.
Eskom could not be reached for comment on which municipalities could be next.
In October, the top 10 offending municipalities included the Free State’s Maluti a Phofung, Matjhabeng, and Ngwathe.
Mangaung electricity entity spokesperson Lele Mamatu said they will meet Eskom on Thursday to discuss their “bulk account”. He did not, however, confirm exactly how much the municipality owes Eskom.
– news@citizen.co.za; OFM News
Eskom debt stands at R9.8 billion collectively