Municipalities should think twice about distributing electricity
Govan Mbeki Municipality is renegotiating with Eskom.
The Govan Mbeki Municipality is not considering giving up its position as middleman between Eskom and residents, regardless of their struggle to pay their debts.
This municipality is among those that received a notice from Eskom that there will be intensive power cuts from 1 April because of their failure to settle their Eskom debt.
Mr David Mabuza, Mpumalanga Premier, called on municipalities to consider whether they really need to distribute energy.
He was speaking at a two-day Premier’s Coordinating Forum in Mbombela and said some municipalities are not financially viable and that they are not making any profit from selling electricity.
Mr Mabuza said if municipalities want to continue distributing electricity, they need to consider finding alternative methods.
He said municipalities find themselves with escalating debt due to interest on the arrears, as well as penalties which suggest they are incapable of selling electricity on behalf of Eskom.
“This is not working, municipalities in the province are not making any profit from selling electricity.
“People are stealing electricity and some residents are not paying for services at all, yet municipalities have to pay.
“Municipalities should think twice about distributing electricity, otherwise they should hand over this responsibility back to Eskom to avert the negative impact on service delivery.”
Mr Bheki Kubheka, head of marketing and communication of the Govan Mbeki Municipality, said this council will not stop from distributing electricity.
“The Premier’s concern is that service delivery should not suffer because the municipality is spending all its revenue on their Eskom debt, which is not the case with Govan Mbeki Municipality.
“Municipal revenue lies with those consumers who are on the debt book, which is above R800 million.
“The municipality is currently on the verge of collecting this revenue and further to this it must be noted that the municipality is able to service all its current accounts with Eskom.”
Speaking about Eskom’s threat to cut off electricity in some of the municipalities, Premier Mabuza said municipalities need to pay their outstanding amount, however they should review their agreement as it is a huge responsibility to manage.
“The Eskom payment terms are onerous and untenable for the municipalities and they need to be reviewed, otherwise we will have no option as a province but to pull out of the business arrangement with Eskom.
“We must negotiate reasonable terms, failing which will result in the municipalities opting out because they do not have the capacity to run the business of selling electricity.”
Mr Kubheka said there are continuous engagements with Eskom and the media will be advised on the next steps in due course.
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