Eskom owed a whopping R24bn - Zweli Mkhize tells parliament

Minister of cooperative governance and traditional affairs Zweli Mkhize has revealed that municipalities owe Eskom close to R25bn.
Minister of cooperative governance and traditional affairs Zweli Mkhize has revealed that municipalities owe Eskom close to R25bn.
Image: ANTONIO MUCHAVE

Cash-strapped power utility Eskom was owed more than R24bn by the end of December‚ up from R17bn in July last year.

Cooperative governance minister Zweli Mkhize made the revelation in the National Assembly on Wednesday while responding to oral questions from MPs.

Mkhize said one of the measures to tackle the non-payment of electricity by municipalities‚ who in turn have complaints that some residents are not paying them‚ was to install pre-paid electricity meters.

DA MP Kevin Mileham had asked Mkhize to explain what progress had been made by government's inter-ministerial task team on the Eskom debt crisis.

"The debt owed by municipalities was R17.7bn as of July 31‚ and it's gone up to R24.3bn to December 31 2018. We made progress last year on the issue of the particular dispute between Salga [South African Local Government Association] and Eskom with regard to jurisdiction with regard to reticulation of electricity‚" said Mkhize.

"To us it was quite an achievement to arrive at unanimity between Eskom and municipalities so that we adopt a binding a co-operative approach in resolving a huge debt owed by municipalities to avoid court battles that were looming.

"It was agreed that there would be a need to restructure the Eskom debt that has to be looked at and that we need to ensure that we manage the defaulting municipalities so that all of them honour their debt. We also have a recommendation on the installation of pre-paid meters to improve the rate of collection‚ as evidence indicates that much higher returns accrue from prepaid meters as opposed to conventional meters."

Mileham said it was worrying that municipal debt to Eskom had shot up.

"That's not progress; that's going backwards‚ that's getting worse‚" he said.

With its debt levels around R400bn‚ Eskom is scrambling for cash to meet its financial obligations and other operational costs.

The power utility last month received a R69bn allocation from finance minister Tito Mboweni during his budget speech to help it pay its creditors.

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