Government departments urged to pay Eskom

Friday, May 29, 2020

The Eskom Political Task Team has agreed on drastic measures to address the municipal debt owed to the power utility.

Over the past year, municipal debt levels have increased by R8.2 billion to R28 billion by 31 March 2020.

Deputy President David Mabuza convened and chaired a meeting of the Political Task Team on Eskom on Friday, where a series of urgent measures were outlined to ensure debt owed to Eskom is paid.

“We have met as the Eskom Political Task Team to discuss in-depth the state of municipal debt to Eskom, as well as recovery interventions of debt owed by various government departments to municipalities.

“The issue of non-payment cannot go unaddressed, as it impacts negatively on the long-term sustainability of Eskom, which inadvertently contributes to the de-industrialisation of our economy.

"In this regard, we are pleased that there is improved coordination at government level, SALGA [South African Local Government Association] and Eskom on how we increase optimal performance of the utility, whilst ensuring security of energy supply. There is still a long way to go in taking Eskom out of the woods, but we are making steady progress,” said Mabuza on Friday.

The measures include:

Supporting defaulting municipalities to structure, and enter into, debt repayment arrangements with Eskom, and ensure that terms of debt repayment are honoured and adhered to.

Strengthening the work of the newly established Multi-Disciplinary Revenue Committee, led by National Treasury, to ensure that all municipal debt is coordinated, tracked and resolved on an ongoing basis.

Targeted technical support is provided to municipalities to build requisite capacities and capabilities to deal with challenges relating to tariffs, billing, collections, metering and illegal connections.

The establishment of an effective institutional mechanism to resolve disputes where there are disagreements on the debt amounts owed.

SOE debt

The meeting also deliberated on debt owed by organs of State to municipalities, with a view of ensuring that the ability of municipalities to pay their debt is not constrained by non-payment of revenue due to them.

In this regard, the meeting directed that all organs of State, including national and provincial departments, must settle their arrear obligations immediately.

National Treasury was tasked to communicate with all affected organs of State to ensure that debt owed to municipalities is urgently settled.

The meeting also received a progress report on energy security interventions through the procurement of additional capacity, as announced by President Cyril Ramaphosa.

In this regard, the meeting discussed current progress in the implementation of the emergency procurement programme, which  will allow Eskom to procure on a short-term basis additional capacity to meet existing gaps.

The meeting welcomed the progress made in procuring of extra capacity, following concurrence by the National Energy Regulator of South Africa to the Section 34 determination to procure 2000MW.

Eskom build programme

The meeting received an update report on the Eskom build programme, with regard to Medupi, Kusile and Ingula power stations.

The meeting was briefed on steady improvements made in energy availability as a result of new Eskom power plants.

The Eskom Task Team was apprised of progress made in resolving major new plant defect challenges to ensure that the new build programme progressively contributes to additional energy availability.

Established by President Cyril Ramaphosa, the Eskom Task Team was also established to oversee the speedy implementation of short-term energy generation and supply measures to address the electricity demand gap.

Given the re-opening of the economy during risk alert 3 of the lockdown, it has become more important to ensure that the lights to stay on.

The next meeting will discuss a more permanent solution of pre-paid electricity. –

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