EC Municipalities debt to Eskom surpasses the Billion-rand mark

Issued by Vicky Knoetze, MPL
Shadow MEC for COGTA

As of the 19th of November, the debt owed to Eskom by Eastern Cape municipalities surpassed the R1-billion mark. This growing debt places Eastern Cape municipalities under significant risk of having their power disconnected.

In a response to questions for oral reply in the Eastern Cape Provincial Legislature today (Wednesday 4 December 2019, the MEC of COGTA, Xolile Nqatha, revealed that, as of 19 November, the collective debt of Eastern Cape municipalities to Eskom was standing at R 1 101 074 549.61.

The main culprits are:

  • Enoch Mgijima Local Municipality            – R 309 374 177.91
  • Walter Sisulu Local Municipality               – R 222 434 154.38
  • King Sabata Dalinyebo Municipality         – R 165 512 670.24
  • Raymond Mhlaba Local Municipality       – R 148 006 933.75
  • Inxuba Yethemba Local Municipality       – R 121 827 459.12

[SEE: IQP 24 response 9]

The Democratic Alliance is extremely concerned that these municipalities will have their power supplies cut, as Eskom has already started issuing notices of their intention to interrupt the power supply to defaulting municipalities in the province.

The DA believes that cutting the power to these municipalities will not put the monies owed in Eskom’s pockets, all it does is punish consumers who have already paid the municipalities for the electricity.

It is the municipalities that fail to pay the funds collected over to Eskom, and the DA believes there needs to be swift action taken against the officials and politicians responsible.

Asked what the provincial action plan was in terms of assisting and supporting municipalities that owe Eskom, to prevent power cuts and load-shedding, MEC Nqatha said he had met with top Eskom defaulters in November,  and that an agreement was reached to have one-on-one meetings between municipalities and Eskom. He also said a task-team had been established to organise these engagements, led by COGTA.

MEC Nqatha said Eskom would be conducting roadshows to discuss billing disputes and possible solutions to deal with the debt.

MEC Nqatha also revealed that there were municipalities in the EC that already had payment agreements with Eskom, but which were not adhering to the agreements and were facing imminent power disruptions. These include:

  • Enoch Mgijima Local Municipality. Eskom is requiring a payment of R 162 421 145.14 to avoid electricity supply interruptions, with a further R146 953 032.77 to be negotiated on settlement.
  • King Sabata Dalinyebo Local Municipality: The municipality has defaulted, but no amount has been determined to prevent electricity supply interruptions as yet, due to a billing error.
  • Dr Beyers Naude Local Municipality: Eskom is requiring the full payment of R 59 311 100.36 to avoid electricity interruptions.

MEC Nqatha said the Makana Local Municipality and Great Kei Local Municipality were fully compliant with payment agreements. He said no other municipalities have entered into payment agreements with Eskom.

This situation is of great concern to residents, local businesses, the tourism industry and the most vulnerable.

Power cuts will have a negative effect on the economy in these already severely cash-strapped municipalities.

It is fundamentally unfair to punish the residents of these municipalities for the failures of the administration of these municipalities to pay Eskom.

It is also clear from the MEC’s response that Cogta has no clear plan in terms of assisting and supporting these municipalities and there is no intention to keep any officials responsible for the chaos.

The DA once again reiterates the call for money that must be paid to Eskom to be ringfenced by municipalities, and for officials and political leadership of municipalities to be held responsible for the woefully inadequate management of their finances.