HomeIndustry SectorsFinance and PolicySouth Africa's Eskom recoups ZAR54m from municipalities

South Africa’s Eskom recoups ZAR54m from municipalities

The total municipal arrears debt has been cut by ZAR54 million since Eskom announced earlier this month it would cut bulk electricity supply to non-paying municipalities

On Wednesday, parastatal power utility Eskom announced that it has signed payment agreements with half of the 20 indebted municipalities that have defaulted on their payments for bulk electricity supply.

The news follows the power utility’s public announcement earlier this month that it would interrupt bulk electricity supply to the top 20 non-paying municipalities on June 5, 2015.

Eskom further stated that consumers within the jurisdiction of a defaulting municipality would be given adequate notice in terms of the Promotion of Administrative Justice Act, no 3 of 2000, and will be given the opportunity to make written representations to Eskom.

Indebted municipalities

Eskom claims that on March 31, 2015, the total municipal arrear debt greater than 30 days was ZAR4.67 billion. Of this amount, the top 20 defaulting municipalities owed Eskom about ZAR3.68 billion for the bulk supply of electricity. Since the announcement, the total municipal arrear debt has been reduced by ZAR54 million.

The 10 municipalities that have entered into payment agreements with Eskom this week are:

  • Nama Khoi Municipality in Northern Cape
  • Nketoana Municipality in Free State
  • Nala Municipality in Free State
  • Dihlabeng Municipality in Free State
  • Thabazimbi Municipality in Limpopo
  • City of Matlosana in North West
  • Naledi Municipality in North West
  • Madibeng Municipality in North West
  • Randfontein Municipality in Gauteng
  • Westonaria Municipality in Gauteng

Non-interrupted power supply unless in breach

According to Eskom, the municipalities that have entered into payment agreements will not be affected by the bulk electricity interruptions.

However, Eskom stressed that municipalities have to comply consistently with payment agreement terms on a monthly basis. If these conditions are not met, interruptions of supply will be implemented without further notice.

Eskom acting chief executive Brian Molefe said: “Eskom has reached a point where it can no longer continue to provide power without receiving payment in return. We are pleased that these 10 municipalities are doing their bit to ensure that they reduce the debt owed to Eskom and we encourage all defaulting municipalities to do the same.”

Eskom has also issued public notices of impending power interruptions to defaulting municipalities in Mpumalanga and the Free State Provinces, effective from June 5, 2015.

The affected municipalities are:

  • Emalahleni
  • Govan Mbeki
  • Lekwa
  • Msukaligwa
  • Maluti-a-Phofung
  • Matjhabeng
  • Ngwathe

The power interruptions will be implemented and regulated according to the schedule below:

Monday to Friday      Saturday and Sunday
06h00 – 10h00

17h00 – 21h00

07h00 – 10h00

17h00 – 20h00

Eskom said it recognises that this will cause undue hardship to members of the public and businesses in the affected areas, and that it will also have an adverse effect on the delivery of other services and that “power interruption and/or disconnection are always implemented as a last resort”.

Molefe concluded: “Eskom is working closely with the relevant national and provincial departments through local, national and War Room structures to manage the municipal financial recovery process and we believe that the work being done within these structures will yield positive results.”

Nicolette Pombo-van Zyl
Nicolette is the Editor of ESI Africa print journal, ESI-Africa.com and the annual African Power & Energy Elites. She is passionate about placing African countries on the international stage and is driven by the motto "The only way to predict the future is to create it". Join her in creating a sustainable future through articles and multimedia content.