Eskom interim CEO Matshela Koko
Photo by: Duane Daws
Since November last year, Eskom has managed to collect R979-million from municipalities that were defaulting on payments to the utility.
Eskom earlier this month started interruptions in bulk power supply to some nonpaying municipalities across the country, as defaulting municipalities’ debt to Eskom had reached R10.2-billion. This was projected to rise to R12-billion by midyear.
Eskom’s warnings that it will interrupt power supply to municipalities have resulted in some successes, with R59-miilion in payments made to Eskom by some municipalities, while others still have not make arrangements to pay the utility.
Eskom interim CEO Matshela Koko on Tuesday said that while the utility had agreed with the various defaulting municipalities that their power supply would not be cut until the end of January, Eskom would not write off the debt.
The company was providing further leniency to these municipalities to avoid job losses and the negative impact of power interruptions on the economy.
Koko further noted that to avoid problems in future, Eskom and the municipalities would jointly investigate solutions that would be tailored for the needs of each municipality. “We do not want to interfere with the licence of municipalities to distribute electricity, [but] we do want to enter service level agreements with them,” said Koko.
This included the installation of prepaid meters to municipal customers, the introduction of a debt collection service at each municipality, getting provincial government to manage Eskom overdue accounts and active partnering with specific municipalities where Eskom personnel would assist.
Asked whether Eskom could afford to roll out the prepaid meters to each customer, Koko responded that, during the last eight months, Eskom’s debt increased by only R4-billion. “We think that there is a business case for Eskom to use its own money to buy prepaid meters and install it,” he added.