Home News Sol fails to pay Eskom

Sol fails to pay Eskom


The Sol Plaatje Municipality has acknowledged that it is experiencing ‘serious cash flow problems’.

SOL PLAATJE Municipality has acknowledged that it is experiencing “serious cash flow problems”, where it defaulted on payments to Eskom, but has provided assurances that salaries will be paid this month.

Today’s council meeting that was convened to discuss the cash flow status was cancelled yesterday due to the non-availability of councillors.

Concerns were expressed that workers would be without a salary this month due to the financial position of the municipal, while the acting chief financial officer (CFO) and acting municipal manager had already been paid.

Sol Plaatje Municipality spokesperson Thoko Riet indicated yesterday that a payment agreement had been entered into with Eskom to keep the lights burning in the city.

“There are serious cash flow problems at Sol Plaatje Municipality. This is known by relevant stakeholders as the municipality has defaulted on its Eskom electricity bill for two months,” said Riet.

She indicated that since defaulting on the July and August accounts this year, the municipality is paying Eskom R14 million each month.

“The original default amount was R159.3 million that includes an interest portion of R6.3 million. As of December 1, an amount of R99 million is still outstanding to Eskom. After reaching a payment agreement with Eskom, the municipality undertook to pay the debt off within a year. Therefore if the municipality honours the payment agreement it will be eligible for a discount where the current account is R48 million.”

Riet pointed out that the municipality’s cash reserves over the past years, which have since been depleted, had “greatly assisted with the cash flow challenges over the past few years”.

“The municipality does not have the luxury of cash reserves any more. The debtors (long term, current, supplier/government and staff) are one of the main causes of the municipality not reaching its cash flow targets.”

Riet stated that the municipality’s cash flow was being monitored on a daily basis, before 8.30am each morning.

“It is also reported on at the weekly executive management team meeting.”

She indicated that employees’ salaries would be paid on December 20 and 21.

“These dates were communicated to all municipal officials on December 9. No employee salaries for December 2019 will be affected.”

Riet explained that the acting CFO and municipal manager, who were seconded to the municipality by the Northern Cape provincial government, received their salaries from provincial government on the 15th of each month.

She added that due to the cancellation of today’s special council meeting, a mayoral committee meeting will take place today, where the finances and cash flow presentation would be presented.

“According to the Speaker, the special council meeting was called off today as most councillors are on annual leave. The next council will take place in January as the Auditor-General of South Africa needs to present the 2018/19 audit results.”

Previous articleCar crashes into shanty
Next articleCosas to meet dept over publishing of matric results