Acting mayor says GMM short on March payment to Eskom
Despite this, interest of R7.253m was incurred on outstanding balances, bringing the total amount owed to R876.65m as of March 31.
SECUNDA – Vusumuzi Mbokazi, MMC for Civil Engineering and acting Executive Mayor of Govan Mbeki Local Municipality, presented the Eskom and Rand Water accounts during a council meeting held on April 30.
He informed the council that the municipality paid R60m towards its Eskom account in March; however, an outstanding balance is above R6 billion.
However, this amount was below the full current monthly billing due to severe cash flow constraints.
Mbokazi said limited revenue collection and competing operational obligations continue to hinder the municipality’s ability to fully settle its Eskom account.
“As a result, interest continues to accumulate, adding R25.014m in March to the principal debt,” said Mbokazi.
He added that management is prioritising Eskom payments within available funds, while engaging Eskom to address both historical debt and current account management through the Distribution Agency Agreement process.
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Mbokazi further stated that the municipality is implementing revenue-collection measures, including stricter credit controls, to settle the Eskom current account in full.
On the water account, Mbokazi said the municipality paid R65m to Rand Water in March, against a billed amount of R39 695m.
Despite this, interest of R7.253m was incurred on outstanding balances, bringing the total amount owed to R876.65m as of March 31.
On May 5, Eskom issued a statement confirming that nine municipalities, including Govan Mbeki Municipality, have received council resolutions to sign distribution agency agreements.
Eskom described this development as “notable progress,” achieved through ongoing engagements with municipalities.
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This follows the issuance of notices under the Promotion of Administrative Justice Act (PAJA) to 14 municipalities across the country in March.
According to Eskom, the municipalities were selected because they had failed to settle their electricity accounts for the past 18 months and did not meet the requirements of the National Treasury municipal debt relief programme.
This situation poses a significant financial risk to Eskom. Eskom added that engagements with the affected municipalities are ongoing, particularly regarding the implementation of the DAAs.
Govan Mbeki Municipality council resolved that the process of entering into DAA be subject to the following conditions:
- That the agreement must ensure that interest is waived on the municipality’s Eskom account.
- The municipality’s equitable share should be excluded from any conditions of the Distribution Agency Agreement.
