Mabuza: To help Eskom, national and provincial debts to councils will be cleared soon

Deputy President David Mabuza answering questions in the NCOP. (Jan Gerber, News24)
Deputy President David Mabuza answering questions in the NCOP. (Jan Gerber, News24)
  • Deputy President David Mabuza said government was getting to grips with Eskom's financial troubles.
  • Government has struggled for years with the spiralling debt that various municipalities owe to Eskom.
  • The country's municipalities are owed R72 billion by various debtors, with R10 billion of that owed to municipalities by national and provincial government departments.


Deputy President David Mabuza told Parliament on Thursday afternoon that the task team dealing with Eskom's financial troubles was making progress in getting to grips with the debt owed to the power utility by municipalities, adding that national and provincial department debts to councils would be addressed soon.

Mabuza was replying to written questions in the National Assembly during a virtual session. Government has struggled for years to get to grips with the spiraling debt that various municipalities owe to Eskom, which currently stands at about R28 billion.

However, the debt challenge is further complicated by the fact that the country's municipalities are owed R72 billion by various debtors in 2019, with R10 billion of that owed to municipalities by national and provincial government departments, according to Business Live.

Mabuza said the political task team into energy challenges committed to expediting the payment of outstanding debts owed to Eskom while directing all national and provincial organs of state to settle all outstanding debts to municipalities.

"The R450 billion owed by Eskom, the biggest amount is the loan taken out by Eskom, for a variety of reasons. The amount money that stems for non-payment of services, you can actually say, is the R28 billion from municipalities. In that we include national and provincial departments.

"I want to assure this house that the next time we speak about this matter, national and provincial departments will be out of this equation because they will settle what they owe to municipalities and an arrangement will be made that that money will be paid to Eskom," said Mabuza.

Mabuza said support structures such as a debt dispute ombudsman and a review of coal contract costs would be introduced to manage financial challenges faced by Eskom.

Hospitals in the dark?

In a supplementary question, Freedom Front MP Tamarin Breedt asked Mabuza to explain the rationale of punishing businesses by declining applications by municipalities to upgrade their power stations, even though they are up to date with their payments.

Breedt said some hospitals found themselves in the dark because they fell under municipalities where many residents did not pay for electricity and, by implication, those municipalities faced cut-offs. 

Mabuza said he would investigate any occurrences of municipalities being denied applications to upgrade power stations. He said in the middle of a Covid-19 pandemic, municipalities should not be cutting hospitals’ electricity off.

"It's important for municipalities to be decisive, because we must stem the tide. In situations like these, I don't expect municipalities to switch off electricity in places like hospitals. We are getting to that point where those that are supplying energy will finally switch off if people don't pay," Mabuza said.

Investigations

Economic Freedom Fighters MP Floyd Shivambu asked about investigations into Eskom chief operating officer Jan Oberholzer, regarding whether there was a conflict of interest by Oberholzer relating to construction company Stefanutti Stocks, which could have led to breaches in Eskom policy.

The probe started in March, following what Eskom's board described as a series of allegations of "corruption, dishonesty, conflict of interest and abuse of power" against Oberholzer. Oberholzer was cleared by the probe's report in April.

Mabuza said government and the task team had no basis to doubt the fairness, and the integrity of the investigation process as conducted against Oberholzer. He called on the board to ensure that the recommendations are implemented in full.

Mabuza added that Minister of Public Enterprises, Pravin Gordhan, would present the report to Parliament’s Standing Committee on Public Accounts soon, where members would be able to enter the discussion and engage the report.

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