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The total debt owed to Eskom by municipalities surged by nearly R10-billion between 30 September 2021 and the end of July 2022. As at 31 July 2022, municipal debt to the power utility stood at a staggering R49.7-billion, Daily Maverick has found.
The August month-end results are still being finalised and are not yet available, Eskom spokesperson Sikonathi Mantshantsha said in response to questions from Daily Maverick.
On whether the picture had changed substantially, Mantshantsha said: “Due to continuing low payment levels, the outstanding debt has been steadily increasing monthly.”
Read in Daily Maverick: “Four Western Cape municipalities owe Eskom nearly R256m; only two have payment plans in place” and “City of Tshwane commits to paying R1.6bn debt after Eskom threat to cut power”
As at 31 July 2022, 96 out of 278 municipalities in SA were indebted to Eskom:
Together, these 96 municipalities owed a whopping total of R49,762,411,689 to the power utility as at 31 July this year.
The following municipalities have the highest amount of debt in each province, as at 31 July 2022:
The debt by local municipalities has been steadily accumulating because Eskom has been lenient in its collection methods over the years, and continued to supply offending municipalities with power — establishing a culture of non-payment. However, without collecting the money owed by municipalities — a crucial part of its revenue — Eskom cannot service its debt load and will be forced to ask the government for more handouts.
Daily Maverick reported in May this year that municipal debt to Eskom stood at R40.9-billion at the end of September 2021.
At the time, the Maluti-a-Phofung municipality in the Free State was Eskom’s largest defaulter, owing it R5.9-billion.
As at 31 July 2022, Maluti-a-Phofung municipality was still Eskom’s largest defaulter, owing the power utility R6.7-billion. DM
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All Comments 9
Amazing work, Victoria, thank you for the clarity. We need more of these real shame and blame stories. I had no idea Msunduzi was a million and a quarter in debt, and I live there! The question is, why the debt and whose mismanagement? And who allows municipalities to rack up debts of over a billion? Small wonder the infrastructure is poorly maintained/ load shredding!
Maybe I am misreading things but I read it as Msunduzi being R127 000 000.00 in Debt. Really scary for those of us who live in Hilton and are subject to little to no service from Msunduzi. An anomalous situation where we pay rates to uMngeni (zero debt), Electricity to Msunduzi (127 million) and water to uMgungundlovu who I can’t find on the map.
The MFMA needs to be amended to ring-fence utility revenue flows but that would cut off the patronage cash flows, so that won’t happen…
Trevor : I don’t see why Treasury does not pay Eskom directly and deduct it from the central allocations the councils receive
Eskom should shed customers with large debt at stage 8 level. Only if that is not enough should Eskom be allowed to start with the rest of us. R50b is 16% of Eskom annual revenue so call it 5GW worth of generation that is not being paid for. So 4 or five stages of loadshedding …
Eskom must now demand payment in advance from defaulting Municipalities, plus a % of the amount owing every month, before power is supplied. The public will start to ask questions about why the funds collected are not paid to Eskom.
Such a simple remedy – cut off supply to the defaulters and stop loadshedding your good consumers.
Makes sense to me.
Could you please express the debt (per province as well as per municipality) in per capita terms to allow meaningful comparison? For Eskom and the taxpayer total debt is meaningful, but per capita debt is a better measure of the quality of governance.
Great work, although the colours in the infographic are misleading. It says the darker the red, the more debt being owed – in that case Maluti-a-Phofung should be dark red, but it’s only an orangey-yellow? Is this just on my browser?
Also @Eskom – you are never going to get this money back with the strategy currently used. Sad because it is usually the municipality “unable to manage their funds appropriately”, whilst a large number of residents in the municipalities do actually pay their bills.
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