Pay Eskom its due, municipalities told

ESCALATING DEBT: PAYMENT PLANS TO BE FORMULATED

There is no money available for anymore bailouts of utility, warns official.

The standing committee on public accounts (Scopa) has called on the top 20 municipalities owing Eskom to provide payment plans by the end of February next year, detailing how they were going to service their debt which has escalated from R1.2 billion in 2013 to more than R26 billion this year.

The South African Local Government Association (Salga), which is an umbrella body representing all municipalities, told Scopa that one of the reasons municipalities could not honour their debt with Eskom was that they were also owed more than R165 billion in unpaid electricity bills by households, government departments and the business sector.

“The fact of the matter is that Eskom must be paid, if the payments are not made it means there must be more bailouts and we do not have resources for these bailouts,” said Scopa chairperson Mkhuleko Hlengwa.

He said government departments owed municipalities R10.2 billion, the business sector R24.7 billion and household debt was at more than R118.5 billion.

According to a presentation by the department of cooperative governance and traditional affairs (CoGTA) to Scopa, the escalating debt in the electricity and water sectors may be attributed to the absence of an economic regulatory regime (infrastructure investments, costing and pricing); a culture of non-payment of services and unauthorised connections, among other issues.

CoGTA said the overdue debt owed to Eskom increased from R1.2 billion in March 2013 to R26.5 billion in October this year. From March to September this year it had increased by R6 billion.

The top 10 defaulting municipalities owed R17.8 billion which represents 67% of the total overdue municipal debt.

Hlengwa said Scopa had also asked for CoGTA and Salga to submit a list of the top 20 defaulters in the private sector.

The inter-ministerial task team that was set up in 2017 tabled a list of recommendations in November 2018 which was approved by Cabinet. These included the installation of prepaid electricity meters and the requirement that Eskom conclude service delivery agreements.