HomeIndustry SectorsFinance and PolicyFree State Municipalities in debt of R736 million

Free State Municipalities in debt of R736 million

Three Free State Municipalities are facing having their power disconnected due to unpaid tariffs totalling R736 million.

Afriforum civil rights movement spokesman, Tiaan Esterhuizen, stated that the only solution to Eskom’s municipal debtor issues is for the energy sector to transition from the public to the private sector thereby opening up a market of fair competition.

Afriforum has approached the court for a court order against Eskom who are threatening to cut off power to three Free State Municipalities, Ngwathe, Maluti-a-Phofung and Dihlabeng due to unpaid tariffs totalling R736 million.

The Minister of Cooperative Governance and Traditional Affairs Pravin Gordhan and the Minister of Public Enterprises Lynn Brown delved into the matter which would prove greatly unfair for many users, which led to Eskom suspending the 3 December cut-off date.

A payment plan was to be presented on 17 October drawn up by relevant municipalities along with Premier of the Free State province, Ace Magashule.

According to sources, Eskom will be in court on 3 December to oppose the application for a final court order. A temporary court order has been granted which prevents Eskom from disconnecting the power supply before the court appearance date.

Eskom will face further financial losses should the final order be granted. With a total of R3 billion in municipal debt the utility cannot afford for other struggling municipalities to add to the bad debts ledger.

Afriforum is acting as the voice for many of their members who pay the municipal bills monthly and who will be the ones to bear the brunt should they be disconnected, said Esterhuizen. This is an issue which their municipality must challenge, not the paying consumer.

He further added that Afriforum can understand the pressure Eskom is feeling and will support the fact that municipalities must submit a reliable payment scheme to the court and in failing to do so will face contempt of court.

Afriforum does not see a bright future should the circumstances remain the same and encourage the takeover of private sector companies who can better manage the electricity distribution for the foreseeable future. Eskom does not have the platform to manage such complexities anymore.

Municipalities are sitting with R68 billion combined maintenance issues which need to be addressed in order to satisfy energy demands, which they are struggling to address due to lack of finances.

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.