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Municipal debt to Eskom heading for R30bn

The Department of Public Enterprises on Wednesday told Parliament this was a major challenge for the embattled power utility, and that municipalities were showing little signs of mending their ways.

FILE: Picture: EWN.

CAPE TOWN - Municipalities’ debt to Eskom is continuing to soar. It hit R28 billion at the end of March – an increase of just over R8 billion in the past 12 months.

The Department of Public Enterprises on Wednesday told Parliament this was a major challenge for the embattled power utility, and that municipalities were showing little signs of mending their ways.

The department was briefing the Standing Committee on Appropriations on developments at Eskom, South African Airways (SAA), and SA Express.

“Despite certain concessions that Eskom has made to municipalities, the situation is not improving,” said the department’s acting director-general Kgathatso Tlhakudi.

Eskom CEO Andre de Ruyter told the meeting that the top 20 defaulting municipalities were responsible for about 81% of the debt. Only 19 of 48 active payment agreements with municipalities were being fully honoured.

“Regrettably, however, only one municipality in the top 20 is honouring the payment agreement concluded with that municipality. The remainder, of course, are still defaulting,” he said.