Gauteng provincial government has reached an agreement with Eskom which involves a payment of R50m on Tuesday in order to stop the power utility from attaching assets of the embattled Emfuleni municipality.

This was announced by cooperative governance and traditional affairs MEC Lebogang Maile on Tuesday following a meeting between Eskom and all the mayors of municipalities in Gauteng.

“The money will be paid today and this will enable Eskom to stop the attachment of assets. A team made-up of officials from Emfuleni and Eskom will then meet to address further details. A report on this should be completed in the next two weeks.

“We are going to have several task teams that will look at each municipalities. There is problems in big municipalities, in most cases attributed to Eskom. There is problems in small municipalities which are attributed to the municipalities, largely about payments. There is also other challenges that need Eskom to work with us to resolve. If we don’t resolve those issues we might not be able to increase the revenue generating capacity of the municipalities,” Maile said.

Last week, vehicles and furniture belonging to the Emfuleni municipality in Vanderbijlpark were seized following a court order Eskom secured against Emfuleni over its debt to the power utility.

Currently the municipality owes Eskom R1.8bn. Meanwhile, Maile said his department will also take over key functions of Emfuleni, such as finance, in order to help stabilise the municipality and it to have a proper payment plan for Eskom.

Currently, the 11 municipalities of Gauteng owe Eskom R2.6bn in total. Other big contributors to this debt are Rand West City with R355m and Merafong local municipality with R377m. Nationally, Eskom is owed R29bn by municipalities for electricity supply.

Eskom CEO Andre de Ruyter commended provincial government’s efforts to help municipalities pay their debt. However, he said Eskom had an obligation to collect money.

“If Emfuleni does not meet its commitment, we reserve our right under the law to act as we have done in the past. For the moment, we accept the good gesture of a payment of R50m, upon receipt of this, we will suspend the further attachment of assets, while we negotiate a credible payment plan.

“Where there is debt, we have to collect that debt. Our lenders are not interested to hear about our challenges in collectors from our customers. They expect to be paid. In order for us to pay our debt, we have to collect from those who owe us,” said De Ruyter.