Four W Cape municipalities owe Eskom R134m in arrears

Four “delinquent” Western Cape municipalities owe Eskom R134 million in arrears.

On Tuesday, the MEC for Local Government, Anton Bredell outlined the debt management challenges facing municipalities. He said data compiled by his department found that municipalities in South Africa were 90 days behind on Eskom payments to the tune of R41 billion.

“This is an (astonishingly) large amount of money and one can understand the severity of Eskom’s financial crisis when this is added to their problems,” he said.

“According to the latest monthly report issued by Eskom, the total debt owed by Western Cape municipalities amounted to 3% of the total municipal debt owed to Eskom. It should be noted that there are currently only four municipalities in the Western Cape that have high outstanding debt older than 90 days. The total debt over 90 days for these municipalities amounts to R134m for the period ending January 2022,” he said.

These four municipalities include Beaufort West which owes R68m, Matzikama owes R82m, Cederberg owes R37m and Kannaland owes 35m. Three of the municipalities, excluding Cederberg, recorded an increase to the debt owed in December which ranged from 5 to 10%. Cederberg managed to decrease their debt by 31.9%.

A year ago, the same municipalities owed Eskom more than R80m in arrears.

“Non-payment to Eskom is a symptom of a larger underlying problem facing local governments throughout the country: A culture of weak or no financial management,” added Bredell.

“As such, my department is working on several initiatives to address this, and to provide the support needed to improve the situation where necessary.

“The Western Cape Department of Local Government in collaboration with the Provincial Treasury have instituted preventative measures in an aim to reduce debt owed to Eskom by municipalities.

“These measures include the regular monitoring of debt amounts owed by municipalities as well as ensuring the effective implementation of and adherence to signed payment arrangements between municipalities and Eskom to ensure that these arrangements are honoured”