Eskom owed R3 billion by municipalities

Power utility Eskom is owed approximately R2.815 billion by 51 municipalities across South Africa, as at 31 May 2014.

This is according to the Democratic Alliance (DA), who pointed out that the total is made up of arrears debt, older than 30 days, and as such is a significant factor in Eskom’s inability to finance its own operations, including maintenance and upgrading of infrastructure.

Earlier in July, Eskom reported a net profit of R7.1 billion for the year ended March 2014, up from R5.2 billion in the previous year.

However, it noted that its earnings were significantly less than the R12.2 billion reported for the six months ended 30 September 2013.

The DA said that the arrears also leads to higher increases in electricity tariffs, as Eskom is required to seek operational revenue from other customers.

The DA said that R1.55 billion of this debt is owed by just seven municipalities, with the worst offender being Matjhabeng Municipality in the Free State, with a bill of R337.8 million.

Emalahleni in Mpumalanga owes R299.4 million, while Maluti A Phofung and Ngwathe, both in the Free State, owe R266.9 million and R216.5 million respectively.

Thaba Chweu Municipality and Lekwa, both in Mpumalanga owe R185.1 and R139.7 million, while Matlosana Municipality in the North West totaled R105.6 million.

The next 10 municipalities on the list collectively owe a further R630 million, the DA said.

“The primary cause of this debt is an inability by the municipalities to collect the revenues owed to them for property rates and services provided. In many instances, this can be attributed to failing billing systems and inadequate credit control policies,” the political party said.

The DA said it will request that the Minister of Public Enterprises, Lynne Brown, and the Minister of Cooperative Governance and Traditional Affairs, Pravin Gordhan, meet with their respective portfolio committees and present a re-payment plan that has been formulated to retrieve all outstanding debt owed to Eskom.

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Eskom owed R3 billion by municipalities