Photo by: Creamer Media
The debt owed by municipalities in KwaZulu-Natal to Eskom has increased by R818-million between March 2023 and January this year, resulting in municipalities in the province now owing Eskom R1.5-billion.
The State-owned power utility supplies electricity in bulk to these municipalities, which, in turn, sell it at a profit to their customers.
With municipal collection rates of more than 70%, Eskom says there is no valid excuse for municipalities to not service their current accounts for the bulk electricity.
Municipal debt puts an immense burden on Eskom’s revenue stream, which negatively affects service delivery and the utility’s ability to maintain and improve infrastructure. It also makes it impossible for Eskom in KwaZulu-Natal to fulfil its obligations and puts the security of supply of the province and municipal customers at risk.
Five KwaZulu-Natal municipalities have been approved for debt relief by the National Treasury, as per the Municipal Finance Management Act, which covers debt accumulated up to March 31, 2023. Four of the five municipalities on the debt relief programme have, however, accumulated debt beyond this deadline, indicating they cannot service their current consumption.
In particular, the Endumeni local municipality owes R44-million not covered by Treasury’s debt relief, while this figure is R16-million for the Mthonjaneni local municipality, R55-million for the Mpofana local municipality and a staggering R664-million for the Msunduzi local municipality.
While some of these municipalities have started paying current bills in full, arrear debt remains unpaid, Eskom states.