Eskom urged to cancel R10bn municipal debt

Eskom should review its debt control policy for municipalities or cancel it completely, according to the SA Local Government Association (Salga).

The association, which is a vanguard for the interests of local government and its representatives at senior state levels, is to take the plight of municipal debt to President Jacob Zuma in a bid to find a lasting solution.

Collective municipal debt to Eskom is close to R10 billion, while R117 billion is owed to municipalities. The debt to Eskom has accumulated due to local authorities’ failure to pay for power supplied by the state-owned enterprise. The municipalities concerned were not servicing the debt, as many residents were not paying their power bills.

Salga, which is holding its national executive committee (NEC) lekgotla in Cape Town, said while its position was that the services used must be paid for by municipalities and customers, it must be acknowledged that some of the root causes of nonpayment were far-reaching and complicated.

“Salga calls on Eskom to work with municipalities to review its credit control policies, which has some bearing on the escalation of the debt, and if it’s not revised or discontinued, the debt problem will not go away,” the organisation said on Wednesday.

The NEC lekgotla was briefed by Cooperative Governance and Traditional Affairs Minister Des van Rooyen who said the municipalities’ debt to Eskom was receiving the attention of his department, the department of public enterprises, the National Energy Regulator and National Treasury.

Salga also expressed concern at Eskom’s threat to discontinue supplies to municipalities with historical debt.

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