Home South African Deputy President Mashatile addresses Eskom and municipalities

Deputy President Mashatile addresses Eskom and municipalities

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The National Treasury is preparing a Municipal Finance Management Act circular dealing with the relief strategy regarding municipal debt owed to Eskom, says Deputy President Paul Mashatile.

Deputy President Paul Mashatile. File picture

THE NATIONAL Treasury is preparing a Municipal Finance Management Act circular dealing with the relief strategy regarding municipal debt owed to Eskom, says Deputy President Paul Mashatile.

It is expected to be released later this month, with implementation expected to start on April 1.

He said that under the National Treasury, the Multidisciplinary Revenue Committee was continuing with its main task of ensuring that all municipal debts were co-ordinated, tracked and resolved.

“In this regard, accounting officers are required to settle all contractual obligations and pay all monies owed, including intergovernmental claims, within 30 days of the submission of an invoice or on a specific period agreed with creditors or suppliers.

“Honourable members, the culture of non-payment, not only by municipalities but by all organs of the state and individual household customers, is concerning,” he said.

Mashatile said the need to encourage a culture of payment for public services could not be overemphasised.

He said that in addressing the utility’s financial challenges, the government had announced further measures with regard to Eskom.

“A debt relief of R243 billion will be implemented over the next three years. Government’s intervention in explicitly taking on this debt is aimed at reducing fiscal risk and enhancing long-term fiscal sustainability.

“This debt relief consists of two components: first, Eskom’s debt service requirements of R184bn. This represents Eskom’s full debt settlement requirement in three tranches over the medium term. Second is a direct takeover of up to R70bn of Eskom’s loan portfolio in 2025/26.”

Mashatile said that would allow the power utility to focus its operating cash flow on much-needed maintenance and capital expenditures while reducing Eskom’s debt by R168bn.

“Further to this work, the government is continuing with the medium- to long-term plans of adding additional capacity to the grid. We are committed to clean energy solutions, including investing in renewable energy solutions.

“Amongst others, this includes the implementation of the integrated energy plan and the amendments to electricity legislation to make it easier for private developers to generate additional electricity. This includes speeding up the implementation of the over 100 projects expected to provide over 9,000 MW of new capacity.”

Mashatile said the government hoped all the measures would facilitate and chart the way towards energy security, resulting in inclusive economic growth and job creation.

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