Eskom wants R4.75 billion from municipalities

Minister Of Public Enterprises, Lynne Brown says that government is hatching a plan to claw back the R4.75 billion owed to it by municipalities.

According to a report in the City Press, the ailing power provider will enlist the services of debt collectors.

Brown pointed to “a very worrying trend on the distribution front’ during a state of the nation debate last week. “As you are aware, distribution is effected through Eskom and municipalities, many of which are not paying Eskom fully or at all.”

Brown gave instructions “to go get that money”.

The minister said that several engagements have been held by Eskom and several National and Provincial Government Departments with the municipalities to deal with the issue of payment.

“To date, the velvet glove approach has not yielded the kind of results which we are seeking and Eskom will be exploring further measures, including disconnections, in cases in which municipalities actually have the money and are deliberately withholding it.”

The City Press said that the interministerial committee on state-owned companies, chaired by Deputy President Cyril Ramaphosa, was examining various options.

This included employing service providers to assist municipalities with debt collection through Eskom and the Development Bank of Southern Africa.

The paper cited Brown as saying that they were also looking at splitting payments, where 70% of revenue would be paid to Eskom and 30% to municipalities.

Government could also amend legislation to enable Treasury to withhold municipalities’ direct allocation of funds and pay that money directly to Eskom on behalf of municipalities.

“We have also asked Treasury to look at a way where we [give a] haircut to the municipalities at allocations. Before they get the funding, they must pay off Eskom,” Brown said.

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Eskom wants R4.75 billion from municipalities