Powerless to fight debt as municipality runs dry

Council confirmed in May they had been unable to pay their Rand Water account due to the large payment made to Eskom in March as part of the Eskom debt repayment agreement.

June 1, 2017

Willemien Aukema & Carmen de Lange 1 minute read

Govan Mbeki Municipality’s debt crisis now involves two major utility providers.

Allegations came to light on 25 May that Council had defaulted on their Eskom payment.

According to the spokesman for Eskom, Mr Khulu Phasiwe, many municipalities, including Govan Mbeki Municipality, have defaulted on some of their payments to Eskom.

“What happened was that these municipalities had over-extended themselves and made offers in excess of their financial capabilities and were then unable to adhere to the terms of the repayment agreements.

“If the lines of communication between Eskom and the municipalities remain open, Eskom will not summarily decide to interrupt electricity supply without further negotiations.”

Mr Phasiwe did, however, confirm that should communications break down, Eskom may well decide to interrupt the power supply to the municipality until full payment is ensured.

This seems to be the current situation for Govan Mbeki Municipality and Mr Phasiwe confirmed although the repayment agreement stated Eskom may interrupt electricity supply should the municipality default on its payment, there are no immediate plans to cut off electricity to Govan Mbeki Municipality.

According to Mr Bheki Kubheka, municipal spokesman, Council has defaulted on the payment, but he laid the blame for the lack of cash-flow squarely at the feet of those who have illegal connections or refuse to pay their own accounts.