Municipalities owe Eskom R10bn, Gauteng is worst offender

2014-08-12 09:21

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Eskom is owed R10 billion in arrears by municipalities around the country, Minister of Cooperative Governance and Traditional Affairs Pravin Gordhan has said.

In reply to a question in Parliament from Inkatha Freedom Party MP Mkhuleko Hlengwa, who asked which municipalities owed money to Eskom and what amount was involved for each specified municipality, Gordhan said Gauteng municipalities owed R3.4 billion, Eastern Cape municipalities owed R650 million and Free State municipalities owed R1.5 billion.

KwaZulu-Natal municipalities owed R1.27 billion, Limpopo municipalities collectively owed R314 million, Mpumalanga municipalities owed R135 million, North West owed R764 million and Northern Cape municipalities owed R225 million,

The only province where the majority of municipalities are run by non-ANC administrations – the Western Cape – also notched up R1.27 billion in electricity payments owed.

Johannesburg City Power owed Eskom more than R1 billion, followed closely by the Ekurhuleni Metropolitan Council’s R972 million and the City of Tshwane Metropolitan (including Pretoria) which owed R793 million.

In the Western Cape, the City of Cape Town Metropolitan owed R873 million, according to the minister.

Clive Keegan, director of the Local Government Research Centre, said the problem was mounting because municipalities were failing to collect revenue from end users.

“There is a reason to believe that what revenue they (the municipalities) do collect is being diverted to other uses rather than to pay Eskom bulk electricity bills.”

Keegan pointed out that the debt figure released in Parliament exaggerated the problem a little as only debt over 60 days is regarded as an accounting problem. According to an Eskom document to Parliament’s energy committee in July, R2.3 billion of the debt was older than 60 days.

Thus, of the R10 billion owed altogether, about R7.7 billion was outstanding for less than a month.

However, the trend remained worrying. The top 30 defaulting municipalities owed R2.1 billion in October 2013. This had risen to R2.5 billion in May this year.

Eskom said it had been agreed by local government MECs in the provinces that all municipal current bills would be honoured by October 2014. All debts must be settled by March 2015.

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