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Mabuza: Spiralling municipal debt threatens Eskom’s sustainability

Jabu Mabuza says last year municipalities owed Eskom R9,5 billion but that by the end of last month that had ballooned to R13.8 billion.

FILE: Eskom board chairperson Jabu Mabuza. Picture: GCIS

CAPE TOWN - Eskom board chairperson Jabu Mabuza has told Parliament that spiraling municipal debt is a threat to the power utility’s viability.

Mabuza says that last year, municipalities owed Eskom R9,5 billion but that by the end of last month that had ballooned to R13.8 billion.

He was speaking to Parliament’s Standing Committee on Public Accounts (Scopa).

Eskom board chair Jabu Mabuza says the billions the power utility is owed by municipalities is one of its most pressing problems, especially given Eskom’s serious financial challenges.

“As at the end of April, our overdue debt sits at over R13.8 billion, including interest.”

Mabuza says municipal debt continues to rise and a new approach to collecting it is urgently needed.

“This is of serious concern as it challenges the sustainability of Eskom. Investors are concerned that the increasing municipal bad debt will make it difficult for Eskom to service its own debt.”

Scopa will also be hearing from the South African Local Government Association (Salga), Cogta and Treasury on the issue.

WATCH: Scopa hearing on municipal debt

(Edited by Shimoney Regter)

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