VANDERBIJLPARK.- Emfuleni Local Municipality (ELM) salaries are expected to be paid on time as multi-level financial and political negotiations on its R1 billion Eskom debt finally resulted in a deal between the warring State entities last week.

ELM and Eskom did not respond formally to requests for confirmation on the deal by publication time, but Eskom and Provincial Government sources confirmed an agreement had emerged.

The deal came last week after months of political negotiations spearheaded by Gauteng Premier Panyaza Lesufi and ELM Executive Mayor Sipho Radebe, and is a precursor to possible National Treasury debt relief for the municipality’s huge Eskom debt.

ELM applied to the National Treasury at the beginning of June for Eskom debt relief and is expecting to hear within weeks if the application – based on stringent Treasury requirements – will be successful.

However, Eskom’s attachments on ELM’s bank accounts will remain in terms of the latest deal, which is linked directly to the payment of a routine national Government infrastructure grant of close to R500 million.

The deal also includes lifting bank attachments in the future for ELM salary payments, third-party payments, and certain service provider payments, but is also expected to leave much less funding for service delivery.

Yet less service delivery funding is in turn expected to lower ELM’s revenue collection rate, variously estimated at between 70 and 90 percent in some cases.

It is not yet clear whether service provider payments in addition to salaries and third party payments are fully covered by the deal or whether only those service providers linked to municipal infrastructure projects will be paid in terms of the deal. The agreement does not include ELM’s debt to Rand Water, said to be well over R1 billion. Experts have estimated that should the National Treasury grant the Eskom debt relief package to ELM, the embattled municipality will save up to R50 million per month on interest payments alone.

Treasury will, in turn, require a massive expansion of ELM’s highly-advanced smart meter network to limit billing corruption and vastly expand municipal revenue sustainability – something which the BXC smart meter programme is well-positioned to do in Emfuleni.

Far more stringent credit control steps are also expected from ELM to bring in the more than R7 billion owed the municipality by residents and businesses in recent years.