Eskom says that\u00a0municipalities in the Free State and the North West Province\u00a0owe it over R10.2 billion – and need to pay up before the 16th of January or they will be cut off.<\/p>\n
On Thursday, the North Gauteng High Court dismissed an urgent case brought by AfriForum, seeking to block Eskom from cutting power to eight municipalities in the provinces on the planned date of 5 January.<\/p>\n
According to AfriForum, the power cuts would be unfair to residents in the affected municipalities who had paid their accounts – however, the court ruled that the municipalities needed to be held accountable for the outstanding debt, and that Eskom was within its legal rights to shut off power.<\/p>\n
According to Eskom, the utility has been engaging with the municipalities since 2011 to claw back the money owed to it, with the overdue debt increasing ten-fold over the past 5 years to R10.2 billion.<\/p>\n
The amount owed was only R6 billion eight months ago, and by March 2017, the debt would total R12 billion, Eskom said.<\/p>\n
“It is imperative for Eskom to collect its revenues or else the entity will not be sustainable. Municipalities contribute almost 42% of Eskom\u2019s total sales and almost 41% of Eskom\u2019s revenue annually \u2013 so non-payment of accounts has a significant impact on Eskom\u2019s cashflow,” the group said.<\/p>\n
Eskom noted that while legislation allows it\u00a0to completely terminate supply to the defaulting municipalities, the group has\u00a0opted for a less invasive approach of scheduled interruptions for certain hours of the day.<\/p>\n
“To entice defaulting municipalities, Eskom offered to suppress future interest on the overdue amounts provided they adhered to the payment plans. At an interest rate of prime plus 5% this is a huge incentive and could save the municipalities millions of rand. Sadly, only two of the payment arrangements entered into are still being honoured,”\u00a0Eskom said.<\/p>\n
The power utility will now move ahead with the scheduled cut-offs, giving the affected municipalities until 16 January to pay up.<\/p>\n
It encouraged residents who felt that they were unfairly impacted by the decision to approach their municipalities or the courts, to hold them accountable for the situation.<\/p>\n