No money for power: EC municipal Eskom debt spirals

Issued by Vicky Knoetze, MPL
Shadow MEC for COGTA

The collective debt owed to Eskom by Eastern Cape municipalities is spiralling out of control and is fast approaching the R3 billion mark.

Money collected from residents and businesses for electricity that must be paid to Eskom must be ringfenced by municipalities. The failure to do so will result in collapsing electrical infrastructure and hardship to residents and businesses alike.

The DA in the Eastern Cape will be writing to the Chairperson of the Cooperative Governance and Traditional Affairs (COGTA) Portfolio Committee, Thabo Matiwane, MPL, to call an urgent meeting of the committee to frame a way forward in terms of provincial assistance and assurances that EC municipalities ringfence money to service their Eskom debt.

In response to questions from the DA, former COGTA MEC, Xolile Nqatha, revealed that the collective Eskom debt of municipalities as of 30 April 2022 was standing at a staggering R 2,85 Billion.

The main culprits are:

  • Enoch Mgijima Local Municipality – R 743 Million.
  • Walter Sisulu Local Municipality – R 444 Million.
  • King Sabata Dalinyebo Municipality – R 132 Million.
  • Raymond Mhlaba Local Municipality – R 265 Million.
  • Inxuba Yethemba Local Municipality – R 325 Million.
  • Dr Beyers Naude Local Municipality – R 285 Million.

Nqatha further revealed that municipalities have failed to reach agreements with Eskom to settle the dispute and that debt is escalating at a high pace. However, no provincial action has been taken, with the matter simply escalated to the National Task Team dealing with Eskom debt.

See response and attachment

This situation is of great concern to residents, local businesses, the tourism industry and the most vulnerable. As Eskom debt spirals, municipalities face the very real threat of collapsing electrical infrastructure, as repairs could be significantly delayed.

Mounting levels of interest on overdue accounts also means that, even if the municipality is not disconnected, significant penalties are being incurred, taking much-needed funds away from service delivery to citizens.

It is fundamentally unfair to punish the residents of these municipalities for the failure of the administration of these municipalities to manage their finances and pay Eskom.

Provincial COGTA has no clear plan in terms of assisting and supporting these municipalities and there is no intention to hold any officials responsible for the chaos.

The DA remains the only party that will place the interests of the people first and will continue to fight to ensure that the government is held to account in delivering services to all people.