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Eskom warns municipal debt is threatening its sustainability

Eskom has taken the drastic step of seizing Maluti-a-Phofung Local Municipality’s bank account in a bid to recover the R5.3 billion the Free State municipality owes it.

Picture: EWN

JOHANNESBURG - Eskom on Wednesday warned that outstanding debt by municipalities was threatening the sustainability of the state-owned power utility.

Eskom has taken the drastic step of seizing Maluti-a-Phofung Local Municipality’s bank account in a bid to recover the R5.3 billion that the Free State municipality owes it.

Eskom’s spokesperson Sikonathi Mantshantsha said they would go to court to recover the outstanding billions.

“This step on the part of Eskom is a result of the repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of electricity,” Mantshantsha said in a statement on Wednesday.

“Eskom will continue to explore all available legal avenues to ensure that outstanding municipal debt is recovered.

“The outstanding municipal debt of R30.9 billion as at end June 2020 continues to threaten Eskom’s sustainability, and municipalities have a responsibility to fulfill their financial obligations for the bulk supply of electricity,” he added.

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