SOUTH African municipalities’ debt to state-owned power utility Eskom Holdings rose almost 10% since March to R49.1-billion by the end of July, Deputy President David Mabuza said.
“This is not a desirable state of affairs for both Eskom and municipalities,” Mabuza told lawmakers in a briefing on Thursday.
“For that reason, Eskom forms part of a multi-disciplinary revenue committee which is meant to address payment of debt to the utility by municipalities and organs of State.”
South African city councils struggle to collect payments for services such as water and electricity from consumers and in turn can’t pay their suppliers or maintain infrastructure.
That has resulted in Eskom threatening to off electricity until it’s paid, and some towns being left without water for weeks as pipes leak and pumps break down.
“Municipalities have been ordered to collect their debts and pay Eskom,” Mabuza said.
Mabuza said the committee was working with the Department of Public Enterprises, Eskom, and indebted municipalities to address the debt owed to the municipality, while the entity tackles the colossal debt of nearly R400 billion which it owes to financial institutions.
“Debt owed by municipalities to Eskom remains a major challenge to the entity’s financial stability. Debt owed by municipalities by Eskom has since grown from R44.8 billion to R49.1 billion between March and July 2022. This is not a desirable state of affairs for Eskom and municipalities,” said Mabuza.
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