HomeIndustry SectorsFinance and PolicyS.Africa: 48 municipalities remain indebted to Eskom

S.Africa: 48 municipalities remain indebted to Eskom

On Tuesday, South Africa’s Cooperative Governance and Traditional Affairs Minister Des van Rooyen said that 48 municipalities owe Eskom billions, an estimated total of R12 billion ($920 million).

According to van Rooyen, 20 of these municipalities had registered progress in terms of compliance, Engineering News reported.

“Some of the issues that have been raised are currently being looked at by the Eskom board as well,” Van Rooyen told journalists following a quarterly Presidential Coordinating Council meeting at Tuynhuys in Parliament.

Eskom issues credit deadline

The power utility has agreed that it will align its credit policy to that of municipalities.

Engineering News explained that the parastatal currently gives a credit deadline of 15 days, whereas municipalities have a 30-day deadline for their lenders.

Van Rooyen said: “There is a positive correlation between the economic status of municipalities and the rate at which they pay their creditors, including Eskom.

“It’s very clear that the lack of economic basis in many municipalities is one of the key contributing factors of municipalities not being able to pay.”

[quote]He added that government would continue to review the current formula for the equitable share of the budget between municipalities. Read more…

“The inter-ministerial task team would continue to mediate the issue, he said. As high as R12 billion, Van Rooyen did not have the exact figure owed to Eskom on hand,” media said.

Citing iAfrica reports, Engineering News noted that on Tuesday the combined debt is R11.54 billion ($920 million).

Eskom plans to cut electricity to around 42 municipalities due to bills being in arrears, the report said.


Featured image: Stock

Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.