Municipality Debts to Eskom Are Totally Unacceptable

12th August 2014.


In response to my question on how much money is owed to Eskom by municipalities by end of June 2014, the Minister of Cooperative Governance and Traditional Affairs, Mr Pravin Gordhan MP, has revealed shocking and worrisome figures.


The Minister has indicated that Eskom is owed R10bn in arrears by municipalities around the country.


A brief overview:


KwaZulu-Natal municipalities owed R1.27bn, Limpopo municipalities collectively owed R314m, Mpumalanga municipalities owed R135m, North West owed R764m, Northern Cape municipalities owed R225m, and Western Cape municipalities owed R1.27bn.


City Power of the City of Johannesburg owed R1.075bn, Ekurhuleni Metropolitan Councilís R972 339, City of Tshwane Metropolitan owes R793 000, The Nelson Mandela Bay Municipality owed R292m, Buffalo City Metro owed R128m, eThekwini Metropolitan owed R813m, Msunduzi Municipality owed R146m and The City of Cape Town Metropolitan owed R873m.


These exorbitant amounts owed to Eskom are an indication of great failure on the part of municipalities to manage their debt in an orderly and systematic manner. There is obvious incapacity in terms of basic financial management.


Even more worrying are the allegations that municipalities are diverting revenue collected from electricity rates to other programmes and projects instead of paying off debts due to Eskom. This narrow-minded financial practice of robbing Peter to pay Paul is going to collapse both municipalities and Eskom at the expense of citizens who in turn bear the brutal brunt of these glaring failures.


The IFP expects the Minister to ensure that the arrangements in place to have municipalities settle their Eskom debts by March 2015 materialise. The consumer finds itself under tremendous financial pressure when Eskom finds itself compelled to increase its tariffs because of debts owed to it.


I will be writing to the Minister seeking further clarity on measures being put in place to address this national crisis; and also to ask to him investigate the reasons behind this on-going problem and obvious flouting of basic financial management practices.


Issued by:

Mkhuleko Hlengwa MP

IFP Spokesperson on Cooperative Governance and Traditional Affairs

076 521 3221 or 083 871 2711