Eskom doubles its winter tariff

2010-08-10 00:00

NATIONAL Treasury officials and the KwaZulu-Natal MEC for Co-operative Governance, Nomsa Dube, are to meet Eskom to try to persuade the power utility to assist Msunduzi Municipality’s financial recovery efforts.

During the public hearings on municipalities at the KZN Legislature, Msunduzi administrator Johann Mettler said Eskom’s exhorbitant winter tariffs have severly strained the city’s cash flow.

He complained that Eskom is being totally unco-operative.

When asked if the municipality could stagger payments, Eskom allegedly replied that it could, but that it would have to pay interest.

Members of the joint committees of finance, Scopa and co-operative governance, presiding over the hearings, were shocked to hear this.

Mettler said that under the summer tarriff the city paid R42 million for electricity as at 15 June 2010.

The winter tariff coupled with Eskom's tariff increase resulted in a R107million bill for the following month.

He said this huge increase in tariffs severely affects the municipality's monthly cash flow.

The joint committee resolved that the Co-operative Governance and Traditional Affairs Department investigates Eskom’s charges and reports progress to the legislature by 30 November.

Mettler also pointed out that in areas within the borough where Eskom supplies electricity directly to residents, Msunduzi is owed over R172 763 million for water sewerage and refuse removal charges.

He said the municipality cannot cut the water supply to recoup the charges as this would be unconstitutional.

“Eskom refuses to disconnect electricity in these areas, which results in the continued non-payment of all service charges owed to the municipality.”

The department’s general manager for municipal finances, Joey Krishnan, pointed out that when Eskom operates within the jurisdiction of a municipality then the control of service delivery charges legally falls under the ambit of the municipality.

The joint committee resolved that the Treasury and Dube urgently intervene to ensure that Eskom co-operates with Msunduzi Municipality in cutting off electricity supplies to defaulters who refuse to pay their service charge arrears.

Progress has to be reported to the joint committee by 30 September.

The committee also undertook to help the municipality ensure that outstanding debts are collected from government departments.

The national Department of Works owes the most — R31 018 million. Land Affairs owes R4 million.

The legislature session resolved that provincial departments should liaise with their national counterparts to pay the debts.It also asked the provincial treasury provide a report by 30 September on debts owed by provincial departments.

The joint committee also wants to know what amounts are still outstanding, and the reasons for these arrears.

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