Mpumalanga municipalities charged nearly R1 billion interests on their Eskom debt every year

Issued by Trudie Grovè-Morgan: MPL – DA Provincial Spokesperson on CoGTA
21 May 2020 in Press Releases

Mpumalanga’s 21 municipalities are billed an alarming R1 billion interest rate on their Eskom debt every year. This information was revealed in reports from the portfolio committees on Human Settlements and CoGTA.

According to the reports, the Mpumalanga provincial Eskom debt for the month of March 2020 was just over R8 billion and the total interest charged by the entity was R78 061 896. Assuming that such interests are charged on a monthly basis; then the entity is roughly charging municipalities in the province over R936 million (in interest charges) over a twelve-month period.

The Democratic Alliance (DA) is concerned that the repayment of Eskom debt has always been an issue in our province due to non-generation of revenue, large number of illegal electricity connections, inaccurate billing systems, and high interest charges by the entity on overdue accounts.

The Eskom debt in our province is extremely concerning given the fact that towards the end of 2016, we only owed Eskom R990 million.

Below is a table reflecting a municipality’s Eskom total debt and interest charged for March 2020:

1. Emalahleni owes R3.8 billion and charges R32 967 498 interests in March.

2. Govan Mbeki owes R 1.8 billion and charged R20 645 151 interest in March.

3. Lekwa owes R 1 billion and charged R10 076 743 interest in March.

4. Thaba Chweu owes R707 million and charged R5 241 821 interest in March.

Information taken from individual monthly reports of two municipalities:

1. Emalahleni:

For the period ending 31 March 2020 the municipality owed Eskom an amount of R3.8 billion and the Department of Water and Sanitation R220 million (more recent). The municipality also noted that they do not have a repayment plan with Eskom.

Due to issues relating to revenue generation, the municipality is owed over R4 billion for services which were provided to consumers, money if capitalised on, would service the Eskom debt.

2. Govan Mbeki

For the period ending 29 February 2020 the municipality owed Eskom an amount of R1.8 billion and Rand Water R246 million. During the month of February 2020, the municipality lost 55.94% of the electricity it purchased. Due to issues relating to revenue generation, the municipality is owed R2 billion for services provided.

Having such a large amount of both debtors and creditors is further hampering the ability of these municipalities to roll out services and as such they are failing to live up to their constitutional mandates.

Lack of political will, financial mismanagement, and incompetency as a result of Cadre Deployment must be blamed for the mess in municipalities.

Should residents vote the DA to run Mpumalanga municipalities, we will ring-fence ratepayers’ monthly electricity payments, which ANC-led municipalities have ignored for years – hence this crisis. We find no justification for why residents should suffer due to the municipalities’ incompetence.