South African municipalities are buckling under the pressure of non-payment for services which has resulted in dwindling revenue, threatening delivery of service to communities, the Cooperative Governance and Traditional Affairs (CoGTA) said late on Thursday after its minister Zweli Mkhize met officials.
Mkhize undertook to request the assistance of the President’s Coordinating Council to get defaulting government institutions to service billions of rand in unpaid municipal accounts, CoGTA said in a statement.
Mkhize also chaired a meeting on bulk electricity reticulation and distribution and the heavy debt owed by municipalities themselves to state-owned electricity company Eskom, which heard that the entire industry was saddled with a distribution infrastructure backlog, an unsustainable distribution model and a fragmented tariff model.
An inter-ministerial task team looking into the issue would engage all involved stakeholders to "explore amicable ways of restructuring the debt without compromising the interest of the country", CoGTA said.
Eskom would also need to explore how reviewing electricity billing elements, determining the cost of supply, ring-fencing old debt and introducing a prepaid system for bulk electricity could minimise the escalating debt owed by municipalities, it added.