Cash-strapped municipalities’ debt might soon be cleared as the government forges ahead with promises of providing relief to municipalities that cannot afford to pay what they owe Eskom.
Speaking in parliament Deputy President Paul Mashatile described municipality debt as a crisis that was worsening the power utility’s financial state.
Mashatile said the culture of non-payment, not only by municipalities but also government departments and residents, was concerning.
“As of the end of December 2022, municipalities owed Eskom R56.3bn, and the debt is rising. It is clear that we need a debt-relief strategy that will acknowledge the inherent risk of unviable municipalities,” Mashatile said.
With the government providing the ailing power utility with debt relief of R254bn in the next three years, Mashatile said Eskom would provide incentivised relief to municipalities whose debt was unaffordable.
However, he warned that relief to cash-strapped municipalities would come with conditions to ensure there would be no build-up of debt again.
“Some of the conditions will include the installation of prepaid meters to correct the underlying behaviour of non-payment and operational practices in the affected municipalities.”
A National Treasury Municipal Finance Management Act circular which will regulate the municipal debt relief strategy is expected to be implemented in April.
These are the five municipalities who owe Eskom the most
... and how much is on their bill
Image: Justin Coomber
None of the metropolitan municipalities in the country feature in the top five owing Eskom billions of rand.
Maluti-a-Phofung local municipality in the Free State is the highest-owing municipality with a R7.2bn debt, Eskom told TimesLIVE. Second on the list is Emalahleni local municipality in Mpumalanga, which owes the power utility R7.1bn.
Emfuleni local municipality in Gauteng takes the third spot, owing R5.8bn, followed by another Free State municipality, Matjhabeng on R5.2bn.
With a R3.6bn debt, the Govan Mbeki local municipality in Mpumalanga is fifth on the list.
Despite developing a debt management strategy , Eskom said only a few municipalities had entered into active agreements with it.
Cash-strapped municipalities’ debt might soon be cleared as the government forges ahead with promises of providing relief to municipalities that cannot afford to pay what they owe Eskom.
Speaking in parliament Deputy President Paul Mashatile described municipality debt as a crisis that was worsening the power utility’s financial state.
Mashatile said the culture of non-payment, not only by municipalities but also government departments and residents, was concerning.
“As of the end of December 2022, municipalities owed Eskom R56.3bn, and the debt is rising. It is clear that we need a debt-relief strategy that will acknowledge the inherent risk of unviable municipalities,” Mashatile said.
With the government providing the ailing power utility with debt relief of R254bn in the next three years, Mashatile said Eskom would provide incentivised relief to municipalities whose debt was unaffordable.
However, he warned that relief to cash-strapped municipalities would come with conditions to ensure there would be no build-up of debt again.
“Some of the conditions will include the installation of prepaid meters to correct the underlying behaviour of non-payment and operational practices in the affected municipalities.”
A National Treasury Municipal Finance Management Act circular which will regulate the municipal debt relief strategy is expected to be implemented in April.
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