Eastern Cape municipalities’ debt to Eskom now over R1 billion

Eskom debt

As of the 19th of November, the debt owed to Eskom by Eastern Cape municipalities surpassed the R1-billion mark. This places businesses and residents in danger of power cuts.

In his response to questions for oral reply in the Eastern Cape Provincial Legislature on Wednesday, Eastern Cape MEC of COGTA, Xolile Nqatha, revealed that, as of 19 November, the collective debt of Eastern Cape municipalities to Eskom was standing at R1 101 074 549.61.

Municipalities with the largest Eskom debts are:

  • Enoch Mgijima Local Municipality            – R 309 374 177.91
  • Walter Sisulu Local Municipality               – R 222 434 154.38
  • King Sabata Dalinyebo Municipality         – R 165 512 670.24
  • Raymond Mhlaba Local Municipality       – R 148 006 933.75
  • Inxuba Yethemba Local Municipality       – R 121 827 459.12

Democratic Alliance concern at the Eskom debt

The Democratic Alliance in the Eastern Cape said that it is extremely concerned that these municipalities will have their power supplies cut, as Eskom has already started issuing notices of their intention to interrupt the power supply to defaulting municipalities in the province.

“The DA believes that cutting the power to these municipalities will not put the monies owed in Eskom’s pockets, all it does is punish consumers who have already paid the municipalities for the electricity,” said Vicky Knoetze, DA Eastern Cape Shadow MEC for COGTA.

“It is the municipalities that fail to pay the funds collected over to Eskom, and the DA believes there needs to be swift action taken against the officials and politicians responsible.”

Asked what the provincial action plan was in terms of assisting and supporting municipalities that owe Eskom, to prevent power cuts and load-shedding, MEC Nqatha said he had met with top Eskom defaulters in November,  and that an agreement was reached to have one-on-one meetings between municipalities and Eskom.

He also said a task-team had been established to organise these engagements, led by COGTA.

MEC to engage municipalities on Eskom debt

MEC Nqatha said Eskom would be conducting roadshows to discuss billing disputes and possible solutions to deal with the debt.

In his reply, MEC Nqatha also revealed that there were municipalities in the Eastern Cape that already had payment agreements with Eskom, but which were not adhering to the agreements and were facing imminent power disruptions.

These include:

  • Enoch Mgijima Local Municipality. Eskom is requiring a payment of R 162 421 145.14 to avoid electricity supply interruptions, with a further R146 953 032.77 to be negotiated on settlement.
  • King Sabata Dalinyebo Local Municipality: The municipality has defaulted, but no amount has been determined to prevent electricity supply interruptions as yet, due to a billing error.
  • Dr Beyers Naude Local Municipality: Eskom is requiring the full payment of R 59 311 100.36 to avoid electricity interruptions.

MEC Nqatha said the Makana Local Municipality and Great Kei Local Municipality were fully compliant with payment agreements. He said no other municipalities have entered into payment agreements with Eskom.

“This situation is of great concern to residents, local businesses, the tourism industry and the most vulnerable,” Knoetze said.

“Power cuts will have a negative effect on the economy in these already severely cash-strapped municipalities.

“It is fundamentally unfair to punish the residents of these municipalities for the failures of the administration of these municipalities to pay Eskom.”

She said that it is also clear from the MEC’s response that Cogta has no clear plan in terms of assisting and supporting these municipalities and there is no intention to keep any officials responsible for the chaos.

“The DA once again reiterates the call for money that must be paid to Eskom to be ringfenced by municipalities, and for officials and political leadership of municipalities to be held responsible for the woefully inadequate management of their finances. “

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