Plans underway to help municipalities pay back Eskom

Wednesday, August 15, 2018

The Minister of Cooperative Governance and Traditional Affairs (COGTA), Zweli Mkhize, says plans are underway to address the debt that is owed to Eskom by municipalities.

“The Inter-Ministerial Task Team on Electricity Reticulation and Distribution (IMTT) took the decision to establish an advisory panel to provide advice and legal clarity on the constitutional authority for electricity reticulation.

“The purpose of the advisory panel is to advise the Minister of COGTA and the IMTT on the constitutional matter related to electricity reticulation, distribution and supply,” said Mkhize.

The Minister was on Tuesday responding to a question posed by the Democratic Alliance in the National Council of Provinces on the action taken to assist municipalities to pay back Eskom.

According to the Minister, as at the end of May 2018, the total overdue debt was R14.319 billion, with the top 10 municipalities owing R9.985 billion.

The top 10 municipalities that owe Eskom are Maluti A Phofung, Matjhabeng, Emalahleni, Emfuleni, Ngwathe, Govan Mbeki, Lekwa, Thaba Chweu, Ditsobotla and Naledi. Seven of these are also listed as dysfunctional municipalities by the department.

According to Mkhize, who is also the chairperson of the IMTT, the team took a decision to resolve the issue of debt by municipalities by focusing on the root cause of the problem.

“The main problems affecting the electricity business and the ability to pay their creditors are the following broken down into three challenges: constitutional, structural and systematic matters on electricity reticulation. These three matters are believed to be the genesis of the problem,” said Mkhize.

Mkhize said the advisory panel is currently finalising the report on the constitutional matter between Eskom and municipalities -- represented by the South African Local Government Association -- on who has the authority to reticulate electricity in the municipal demarcated areas.

The report is due to be submitted to the Minister and IMTT in September 2018. –