Provincial govt must act as municipal Eskom debt soars past R2-billion mark

Issued by Vicky Knoetze, MPL
Shadow MEC for COGTA

The Provincial Government must step in and assist Eastern Cape municipalities, who now owe Eskom more than R2-billion rand in total, as municipalities are forced to dip deeper into their equitable share to pay their debts.

Cooperative Governance and Traditional Affairs MEC, Xolile Nqatha, is bound by the Section 139 (5) of the constitution and has no choice but to impose a recovery plan to ensure that each of these municipalities meets their financial commitments.

The provincial government needs to step in and take over where their ANC deployed cadres have failed!

A capable state would never have allowed the debt to reach these levels in the first place.

In response to a parliamentary question, MEC Nqatha revealed that the collective Eskom debt of Eastern Cape municipalities had reached a shocking R 2,157 billion, of which R1,322 billion is in excess of 90 days.

The municipalities with the highest arrears are:

  • Enoch Mgijima Local Municipality – R457 827 224
  • Walter Sisulu Local Municipality – R294 616 164
  • Raymond Mhlaba Local Municipality – R205 188 480
  • Inxuba Yethemba Local Municipality – R193 548 246
  • King Sabata Dalindyebo Local Municipality – R165 334 119
  • Dr Beyers Naude Local Municipality – R141 922 205
  • Makana Local Municipality – R37 941 689
  • Amahlathi Local Municipality – R 25 131 025

See: IQP 38 q888, Attachment 1, Attachment 2

These municipalities have proven that they simply cannot effectively deal with their runaway Eskom debt. Despite this, there have been no consequences for those municipal officials who allowed this situation to get so out of control!

In sharp contrast, the DA-run municipality of Kouga owes Eskom nothing and is in the process of establishing a Biomass Plant and a Solar Plant, with the vision of moving most of the municipality off the Eskom grid.

This use of renewable and green energy generation methods is forward-thinking and innovative. It will soon free the people in Kouga from the constant Eskom load-shedding sword hanging over their heads.

The MEC must immediately take action and arrange an urgent meeting with Provincial Treasury to discuss a plan of action, formulate a workable solution to eliminate this debt, and draw up long-term solutions to ensure future debt stays under control.

The plan should include the ringfencing of all revenue collected through electricity sales for the servicing of Eskom accounts and the maintenance and upgrading of municipal infrastructure.

This plan must then be imposed upon the respective municipalities, in line with Section 139 (5).

In the medium to long term, COGTA should focus on bringing financial stability to all municipalities and assisting with the establishment of alternative, preferably renewable, methods of energy production, such as what is being rolled out in Kouga.

The Democratic Alliance will continue to hold the government to account to ensure sustainable local government.