By Sipho Maseko
Mpumalanga municipalities are losing the grip in servicing their Eskom debt which is now over R8 billion from R990 million in 2016.
Though Eskom says they haven’t decided to cut off any municipality around the country however municipalities are failing to honor their payment obligation and agreement which they made with the power utility and they have decided to use courts to force municipalities to pay.
Though some municipalities blamed Eskom for overcharging them way high interest on overdue payments Eskom say brushed off the allegations.
Eskom is owed a total of R29 billion by South African municipalities and Soweto residents alone owe Eskom R20 billion.
In Mpumalanga, the biggest debtor is Emalahleni municipality with a total budget of over R2 billion owing Eskom R3.8 billion followed by Goven Mbeki local municipality in Secunda owing R1.8 billion and Lekwa local municipality in Standarton owing R1 billion.
“In Mpumalanga, Eskom is owed an outstanding R8 billion by municipalities, Some of the municipalities are servicing their obligations, others not so well. We have increased our efforts to collect unpaid revenue by taking legal action against those municipalities who are not meeting their obligations and have not entered into payment terms with Eskom.
Eskom charges reasonable interest in outstanding debt, there would never be a need to discuss interest rates if the municipalities had met their obligations and paid for the services they received from Eskom in the first place.” said Eskom spokesperson Sikonathi Mantshantsha.
Democratic Alliance member of the provincial legislature in Mpumalanga Trudie Grove-Morgan called for putting of the municipalities under administration to find out the real cause of the inability to collect revenue and service their debts.
“According to the reports to human settlements and Cogta the Mpumalanga provincial Eskom debt for the month of March 2020 was just over R8 billion and the total interest charged by the entity was R78 061 896. Assuming that such interests are charged on a monthly basis; then the entity is roughly charging municipalities in the province over R936 million (in interest charges) over a twelve-month period.
The Democratic Alliance (DA) is concerned that the repayment of Eskom debt has always been an issue in our province due to non-generation of revenue, a large number of illegal electricity connections, inaccurate billing systems, and high-interest charges by the entity on overdue accounts. Here there’s a big problem that is why we called for the municipalities especially Emalahleni and Lekwa to be placed under administration so that they can be investigated and find the cause of the problem. We believe the political heads in those municipalities are stubborn and do not listen to the province which brings issues of politics. Whatever it costs even if it takes us to force them through courts we need these municipalities placed under administration,” said Grove-Morgan.
Emalahleni municipality blamed their R3.8 billion debt to a high rate of unemployment, lockdown, and population growth.
“It is true that we are indebted to ESKOM and the debt is accumulative on a monthly basis and the reason is,
The unemployment rate of the Emalahleni Local Municipality is sitting at 28.2 % caused by the closure of industries thus the population growth rate per annum is 3.2% versus the economic rate sitting at 1.3%.
Other factors that contribute to the population growth are lots of mines around the Municipality.
The declaration of national lockdown has a negative impact on the financial sustainability of the municipality.
The municipality is experiencing a very low payment rate due to the non-payment of services. Covid 19 protocols require the municipality to implement health and hygiene measures, safety measures and ensure sustainable provision of essential services.
These require funding additional to current commitments and thus a need for enhancement of revenue collection” said the spokesperson of the Emalahleni municipality Lebogang Mofokeng.
He further said though the municipality is being charged high by Eskom they are willing to pay.
“ESKOM is charging the Municipality Prime plus 2.5% interest rate which is higher than the repo rate and it has thus indicated that interests will be reduced for the Month of May.
The Municipality is committed to making sure that it is paying ESKOM.” said Mofokeng.
