Home News NC municipalities owe Eskom R468m

NC municipalities owe Eskom R468m

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WITH Northern Cape municipalities owing a total of R465 million to Eskom, Co-operative Governance Minister Des van Rooyen (pictured) is in discussion with the premier, provincial MEC and mayors to break the deadlock.

The total owed by South African municipalities to Eskom is R8.2 billion and according to Van Rooyen the debt needs to be brought down by the affected municipalities.

The debt, which is owed to the power utility by a total of 59 municipalities country-wide, has stood for some time, with municipalities defaulting after previous agreements to pay the outstanding debt.

In a written parliamentary reply earlier this week, Van Rooyen said they had managed to reach some agreements with the provincial leaders and mayors on the debt.

Eskom has been complaining about municipalities failing to settle the debt.

“In holding municipalities accountable, the Department of Co-operative Governance and Traditional Affairs, as part of the inter-ministerial task team on Eskom debt, has been in discussion with premiers, MECs and mayors,” said Van Rooyen.

They reached an agreement with Eskom that it would cut its interest rate charged to municipalities from five percent to 2.5 percent plus prime.

The power utility would consider reviewing charging interest after 15 days instead of 30 days, in line with the law.

When municipalities start paying, the money would go straight to the actual debt rather than into the interest, said Van Rooyen.

He said the number of municipalities which had entered into agreements with Eskom had increased from 24 last year to 54.

“The inter-ministerial task team is in the process of resolving the legislative matters on electricity reticulation between Eskom and municipalities,” said Van Rooyen.

He said that out of the total of R8.2bn owed by municipalities, 11 Northern Cape local municipalities owed a combined total of R465 million.

New Khai Garib entity (Kakamas, Kenhardt and Keimoes) have the Province’s highest debt at R92.2m, followed by NamaKhoi with a debt of R75.2m and Siyancuma with R72.2m. Tsantsabane Municipality owes R58.8m, while Dikgatlong owes R43.8m, followed by Thembelihle municipality with a debt of R39.7m and Magareng with R26.6m. Other local municipalities in arrears include Ga-Segonyana (R21.4m), Siyathemba (R16.9m), Emthanjeni (R12.m) and Phokwane (R5.3m).

The Free State had the biggest debt of R3.6bn against Eskom.

In the Free State, two municipalities had the largest debt – more than R1bn each. Maluti, a Phofung municipality, owed Eskom R1.6bn and Matjhabeng owed the power utility R1.2bn.

The other municipalities in the province had debts of R124 000, and less.

The Free State was followed by Mpumalanga, which was owing Eskom R2.2bn.

Emalahleni had the largest debt of R937m, with Thaba Chweu owing R364m.

In the North West, municipalities there owed Eskom a total of R780m.

In Gauteng, debt was sitting at R508m with Randfontein having the largest debt of R149m. It was followed by Mogale City, which owed R127m.

The Northern Cape at R465 million, was followed by the Eastern Cape at R328m, Limpopo R287m, Western Cape R11m and KwaZulu-Natal R6m.

Only two KZN municipalities, eDumbe and Mpofana, owe R2.6m and R3.4m respectively.