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'R198 million Eskom debt placing industry at risk in Enoch Mgijima Municipality'

Sep 10, 2019
'R198 million Eskom debt placing industry at risk in Enoch Mgijima Municipality'

Bhisho - The Enoch Mgijima Municipality owes Eskom over R198 million in debt and has been unable to maintain a payment arrangement entered into with the State-Owned Utility in November last year, as its debt has escalated, the Democratic Alliance (DA) in the Eastern Cape said on Tuesday.

"Keeping the power on is critical to keeping people in jobs," said Jane Cowley, DA Enoch Mgijima Constituency Leader.

"The Democratic Alliance is fighting tooth and nail to put Enoch Mgijima back on track. As part of this plan, the DA is calling for urgent intervention, with the immediate ringfencing of finances collected for electricity, to prevent the debt to Eskom growing even further.

"Unless this takes place, the municipality is at severe risk of having its supply cut by Eskom, even though the residents and business have been paying the municipality for the electricity they have consumed."

She said that even more concerning is aging infrastructure, such as that in the Ezibeleni township, which has not been maintained for more than 10 years.

"This has resulted in an unreliable electrical supply that has negatively impacted on local industry.

"Machinery used to manufacture plastic bottles at a local bottling factory, for example, requires a constant power supply, otherwise the heated plastic coagulates and clogs up the machinery, with huge cost implications," Cowley added.

"The clinics and day hospital in the area are also impacted, with medication that needs to be refrigerated becoming nonviable and needing to be replaced at additional cost, as refrigeration units lose power."

She said that in response to a parliamentary question, Eastern Cape MEC of Cooperative Governance and Traditional Affairs, Xolile Nqatha, said the bulk of the Eskom debt was older than 60 days.

"Nqatha said the municipality have budgeted for the refurbishment and upgrade of the the Ezibeleni Substation in the next financial year, but if drastic steps are not taken to repay the debt to Eskom, there might not be any power for the substation to process," she added.

"Nqatha’s assurances that the Department is working on a Financial Recovery Plan with National Treasury, is cold comfort for the residents who have been left at the mercy of a failed administration that has wasted their money for more than a decade.

"It is also vital that the Financial Recovery Plan that is being drafted does not simply look at increasing service costs to the overburdened residents and businesses to make up the shortfall caused from years of mismanagement."

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