Eskom board chairperson Jabu Mabuza says municipal debt is a serious concern and poses a challenge for the power utilities investor sustainability.
Mabuza on Wednesday said municipal debt had increased from R9.5-billion to R13.5-billion, adding that there was a 42% escalation between 2017 and 2018.
“The amount owed to Eskom by municipalities keeps growing. Financial sustainability for Eskom will remain difficult for as long as debt cannot be secured,” said Mabuza while briefing SCOPA on the status of Eskom in Parliament.
Mabuza, however, told parliamentarians that notable strides have been made to turn the utility’s situation around but he emphasised that municipal debt remains a challenge.
He added that there were penalties for non-paying customers which included power interruptions of up to six hours.
Speaking at the same briefing SALGA’s electricity expert Nhlanhla Ngidi said they needed to fix municipal systems to ensure that customers do indeed pay municipalities the electricity tariffs they owe. Ngidi further told Scopa members that SALGA was proposing that the provincial and national government help them train local government officials on revenue management.
At the same time, Corporative Governance and Traditional Affairs (COGTA) Minister Zweli Mkhize, on Tuesday told members of parliament that thirty-one percent of the country’s municipalities were completely dysfunctional.
He said 12 municipalities out of 18 in the North West province were currently being managed by COGTA, adding that they were all under administration.
“87 priority municipalities are distressed or dysfunctional and are receiving national support under Section 139. Several municipalities owe Eskom R23.6 Billion for services and Water Board.
” Municipalities in the Free State and Limpopo are worst offenders causing a massive blow to big business,” the minister said.