Municipalities owe Eskom R10bn

Cape Town - Eskom is owed R10bn in arrears by municipalities around the country, Minister of Cooperative Governance and Traditional Affairs Pravin Gordhan has told parliament.

In reply to a question 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 R3.4bn, Eastern Cape municipalities owed R650m and Free State municipalities owed R1.5bn.

KwaZulu-Natal municipalities owed R1.27bn, Limpopo municipalities collectively owed R314m, Mpumalanga municipalities owed R135m, North West owed R764m and Northern Cape municipalities owed R225m.

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

City Power of the city of Johannesburg owed Eskom R1.075bn, followed closely by the Ekhurhuleni Metropolitan Council’s R972 339m and the City of Tshwane Metropolitan (including Pretoria) which owes R793 000.

The Nelson Mandela Bay municipality - which includes the  Eastern Cape commercial capital of Port Elizabeth - owed R292m, with Buffalo City Metro - which includes East London - owing R128m as at the end of June this year.

In KwaZulu-Natal, the Ethekwini Metropolitan (including Durban) owed the most at R813m followed by the Msunduzi municipality (including Pietermaritzburg at R146m.

The most owed by a Limpopo municipality was the Thabazimbi Local Municipality at R77m.

In Mpumalanga, the municipality owing Eskom the most was Emalahleni local municipality at R428m.

In the Northern Cape, the Sol Plaatje local municipality - including Kimberley -  owed the most at R47m while in the North West the City of Matlosana local municipality owed R174m.

In the Western Cape, the City of Cape Town Metropolitan owed R873m, according to the minister.

Clive Keegan, director of the SA 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, debt of  R2.3bn was owed which was older than 60 days or more. Thus of the R10bn owed altogether, about R7.7bn was outstanding for less than a month.

The trend, however, remained worrying. The Top 30 defaulting municipalities owed R2.1bn in October 2013. This had risen to R2.5bn in May this year.

Eskom said it had been agreed by all 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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