Eskom will suspend the seizure of assets of the Emfuleni Local Municipality after receiving a payment of R50 million.
In a joint statement on Wednesday, Eskom and the Gauteng department of Cooperative Governance and Traditional Affairs (Cogta) said a meeting had resolved to make the payment to the power utility.
The decision follows on a meeting between an Eskom delegation led by CEO André de Ruyter and the provincial Cogta delegation led by MEC Lebogang Maile, at the Gauteng Legislature in Johannesburg.
The meeting was convened by Maile following legal action taken by Eskom to attach assets of the Emfuleni Local Municipality to recover R2.3 billion in oustanding debt.
It was resolved that Emfuleni will from now on pay Eskom its monthly accounts in full.
“The meeting signalled the beginning of the much needed coordination between government and various organs of state to ensure a systematic, holistic approach in resolving issues that might hinder delivery of services to communities,” said Maile.
Both parties agreed to work closely together in promoting a culture of paying for services on time, starting from municipalities, cascading all the way down to communities.
This will accord Eskom, which faces considerable financial constraints, an opportunity to meet its own obligations to its lenders.
In Gauteng alone, Eskom is owed R3.77 billion by a number of municipalities, with the exception of Ekurhuleni Metropolitan; City of Johannesburg and Midvaal Local Municipality.
Maile said Cogta will prioritise all efforts in assisting the Merafong Municipality and the Rand West Municipality who have accumulated unpaid debts of R377 million and R355 million respectively.
Both parties agreed to work together in assisting the two municipalities to meet their payment obligations.
The meeting also resolved that joint teams will work out a feasible, sustainable and affordable payment plan for consideration by both parties.
“Other matters were deferred to a broader meeting that will be convened in a month’s time wherein progress will be tracked and reflected upon,” said the two parties
— Eskom Hld SOC Ltd (@Eskom_SA) March 18, 2020