Municipalities, Eskom strike win-win deal

DEPUTY President David Mabuza has said the government has entered into a deal with Eskom and municipalities for the power utility to take over the collection of rates in defaulting municipalities, which owe it more than R30 billion.

This would enable municipalities to increase revenue collection.

Mabuza told Parliament yesterday that they had struck a deal between 18 municipalities that had a huge debt with Eskom, to be first in line for the project.

In the past, Eskom has gone to court to try to recoup the billions it is owed by municipalities.

During a question-and-answer session in the National Assembly, Mabuza said they had reached an agreement between municipalities and the power utility.

“In our engagement with municipalities owing Eskom, we finally reached an agreement. The first 18 municipalities, owing the largest sums of money, are going to ask Eskom to take over the distribution (of electricity) and collection of rates,” said Mabuza.

Eskom spokesperson Sikonathi Mantshantsha said yesterday that the arrangement was similar to the one that the power utility had recently signed with Msunduzi Municipality, where it took over the maintenance of some of the city’s infrastructure and would bill the municipality for the work done.

Regarding the revenue collection aspect of the matter, he said these matters would be agreed to with each municipality.

“These agreements are still being negotiated,” he said.