Today, 14 June 2018, Cooperative Governance and Traditional Affairs (CoGTA) Minister Dr Zweli Mkhize, as a chairperson of the Inter-ministerial Task Team (IMTT) on Electricity Eticulation and Distribution briefed the Standing Committee on Public Accounts (SCOPA) about government’ plans to resolve the challenge of debt owed to Eskom by municipalities for bulk electricity.
The minister was leading a team of officials from the institutions forming part of of the IMTT which comprises of CoGTA, departments of national treasury, energy, public Enterprises, water and sanitation; South Africa Local Government Association; and Eskom.
Minister Mkhize said government was extremely concerned about the amount of Eskom debt which has now escalated to about R10,7- billion and on the other hand the culture of non-payment for municipal services. Currently municipalities are owed R139- billions for municipal services.
He said through the Advisory Panel that the IMTT has established, all parties are working closely together to find lasting solution to various problems, some of of which are beyond the concerned municipalities and Eskom.
Minister Mkhize said some of the matters that government was working on as part of the solution to was :
Resolving the perceived tension between Eskom and municipalities over the allocation of areas for servicing as both parties supply electricity to different stakeholders within a municipality based on licensing by National Energy Regulator of South Africa.
Engaging Eskom regarding their credit control policy to curb the further escalation of the debt as there are concerns from municipalities about the interest that the utility charges on the overdue amount.
Engaging Eskom over the tariffs they charge municipalities for bulk electricity and the interest charged on municipal debt.
Improving governance in municipalities to ensure there was efficiency and qualified officials to manage municipality financial functions such as revenue collection.
“All the parties are determined to find lasting solutions and municipalities have indicated that they are keen to support all the efforts and implement the decisions deriving from the process,” said Minister Mkhize.
He said while government was looking at the constitutional and legal issues such as the issue of jurisdiction and mandate for the supply of electricity, municipalities and Eskom are making headways in creating a conducive environment to reduce debt in the immediate term.
These relates to:
- reducing penalties charged to municipalities for high electricity usage;
- increase from 15 to 30 days upon which an overdue amount may attract interest;
- changing the model for penalising municipalities for exceeding the allocated bulk electricity; and
- putting on hold the discontinuation of electricity supply to municipalities with debt.
The Minister said the IMTT Advisory Panel is currently engaged with many of the issues and the report of its work is expected by the end of July 2018.
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