Ricochet News

Municipalities given more time to clear Eskom debt

Jan 20, 2017
Municipalities given more time to clear Eskom debt

Public Enterprises Minister Lynne Brown has instructed Eskom to give municipalities until the end of this month to clear their outstanding arrears before switching off the lights.

In a statement released on Thursday, Minister Brown said turning off the power supply does not only impact on individual ratepayers and municipalities, it has potentially disastrous effects on businesses and jobs.

“One cannot help feeling sympathetic to those who pay their electricity bills in good faith, only for the payments to be consumed by municipalities with precious little income and resources.

“This is a matter of national importance that I would urgently hope to discuss with the Minister of Finance,” Minister Brown.

She urged municipalities in arrears to move with speed to clear their debt.

“In the meantime, the amount of R10.2 billion, which grows exponentially, has a potential to undermine the sterling effort undertaken to restore Eskom back to its sound financial footing.

“The security of future revenue is paramount to Eskom's sustainability. It is critical for all municipalities to institute pre-paid billing to help build a payment culture,” Minister Brown said.

She said a healthy Eskom does not only meet its social mandate, through electrification and other transformational targets, but it also contributes to the positive sovereign rating of South Africa.

Minister Brown said South Africa cannot afford an Eskom “whose ability to borrow from financial markets is constrained by the prohibitive interest rates arising from the negative financial position, which will result if we don’t resolve this matter”.

The Minister said she was inspired by the cooperation by some municipalities.

“I am particularly humbled by the intervention of the respective Premiers and committees’ willingness to join hands with the relevant stakeholders in an effort to find a lasting solution in our country’s interest,” said Minister Brown.

– SAnews.gov.za