Municipal debt relief plan sparks rage in North West community

Community leaders in the North West are mobilising communities to rally against the National Treasury’s move to write off debt owed by municipalities to Eskom while the government insists that residents should pay their municipal debt.

A community leader at Matlosana local municipality in the Kenneth Kaunda district, Pakiso Mqikela, slammed Treasury’s proposal that Eskom should write off R70 billion of municipal debt over three years as spin-off of the R254 billion debt relief to Eskom.

ALSO READ: Eskom debt relief extended to municipalities

During his medium term budget last October, Finance Minister Enoch Godongwana said the debt relief would see government taking over between one and two thirds of Eskom’s debt.

Mqikela said debt relief given to Eskom should instead lead municipalities to cancel residents’ debts. He criticised Treasury for proposing municipalities should put pressure on residents to pay up Mqikela appealed on social media to ANC councillors, politicians, community and civic leaders to speak up on behalf of communities and put pressure on government to cancel residents’ debt.

In terms of the new arrangement, municipalities owing with existing payment plan they previously entered into with Eskom will have these arrangements suspended and they would no longer have to pay any arrears, interest or penalties.

Legal action

Eskom will also terminate any legal action against them. The writing off of municipal debts is one of the conditions that the government placed to Eskom for issuing the debt relief to the power utility. In the process, the municipalities would have to apply for a write-off that would be accompanied by strict conditions.

The municipal debt relief included paying within 30 days instead of 15 days with interest reduced from five to two percent. If a municipality fulfils these conditions for 12 consecutive months, Eskom will write off one-third of its debt, in consultation with Treasury.

Mqikela questioned the decision to give debt relief to municipalities but not extending the same to residents who owed municipalities.

Concealing corruption

He accused Godongwana of trying to conceal the corruption involving politicians at Eskom as revealed by its utility’s former chief executive André de Ruyter by proposing the write-off of municipal debt to Eskom.

He also lambasted the National Energy Regulator of South Africa for asking for a further tariff increase for Eskom on top of the 18% that was granted earlier.

The regulator had proposed another 15% increase. Mqikela asked for community leaders to consider the fact that the unemployment rate was the highest and residents were also affected by load shedding and many people had inherited their municipal debt from their parents and grandparents

ALSO READ: Government to take on Eskom’s debt of R254 billion