Eskom declares dispute with Lesedi Local Municipality over R125m debt

5th July 2023 By: News24Wire

Eskom has declared a dispute with the Lesedi Local Municipality in the Sedibeng district of Gauteng after exhausting all avenues to recover what the municipality owes.

The local municipality’s current debt owed to Eskom is R125-million as at 30 June 2023. This is compounding debt from June 2022 when the municipality started to default on its payments.

The dispute has been declared in line with the Intergovernmental Relations Framework Act, which provides mechanisms and procedures to settle such matters. Eskom must exhaust intergovernmental processes before it is entitled to cut off power to defaulting municipalities.

According to the utility, Lesedi had submitted a payment proposal to Eskom in January this year to settle the arrear debt. Eskom accepted this proposal on the condition that it would continue to service its monthly current account.

"However, the municipality defaulted on both the repayment and the current account by failing to settle the April 2023 invoice of R20-million that was payable on 29 May 2023, and only paid R7-million. The May 2023 invoice of R21-million which was due on 29 June 2023 remains unpaid. Eskom has issued the June 2023 invoice of R38-million and that is payable on 27 July 2023," Eskom said in a statement.

Lesedi's municipal manager and spokesperson could not immediately be reached for comment.

Eskom said failure to service debt by Lesedi Local Municipality and other defaulting municipalities burdens the power utility’s revenue streams, ultimately affecting service delivery. This further puts a strain on Eskom's finances and its ability to operate effectively.

South African municipalities currently owe Eskom more than R57 billion.