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Gordhan to act against municipalities which owe Eskom money

Jan 11 2017 19:51

Cape Town - Finance Minister Pravin Gordhan said National Treasury will act against municipalities which have failed to settle their debt to Eskom, Fin24’s sister publication Netwerk24 reported. 

In a letter to Democratic Alliance MP for the Free State David Ross, Gordhan raised his concern over Eskom’s planned power cuts on January 16, saying that National Treasury would consider withholding national grants to the non-paying municipalities.

Judge Hans Fabricius on Thursday ruled in the North Gauteng High Court that Eskom may cut off power supply to the eight indebted municipalities as a means to recover outstanding debt. The ruling came after AfriForum filed an urgent court bid to prevent Eskom from cutting the power supply to the eight indebted municipalities. 

READ: Eskom not constitutionally obliged to provide power - judge 

Fabricius said the municipalities – Nala, Dihlabeng, Mantsopa, Nketoana, Moqhaka, Masilonyana, and Tokologo municipalities in the Free State and Naledi, Ditsobotla, Lekwa Temane, Maquassi Hills, Ramothsere Moiloa, Kgetleng, Tswaing, Mamusa and Ventersdorp municipalities in the North West - should be held accountable for not settling their debts.

Fin24 earlier reported that Eskom’s acting CEO Matshela Koko said the power utility’s capital expenditure for municipalities was R70m, and the outstanding debt by municipalities stood at R12bn. This was one of the reasons why rating agency Standard and Poor’s downgraded the power utility over uncertainties.

Meanwhile, the DA’s Kevin Mileham said in a statement that the African National Congress must take “full responsibility for the impending electricity crisis in a number of municipalities across South Africa. 

'Cuts will cause jobs blood-bath'

“The people of these municipalities have been let down by dishonesty, corruption and maladministration, which has led to non-payment to Eskom and major debt,” Mileham said, adding that the planned electricity cuts will not only “severely undermine basic service delivery, but will also collapse local economies and cause a jobs blood-bath”.

All eight affected municipalities are under ANC rule. 

Ross addressed a letter to the National Energy Regulator of South Africa (Nersa), requesting its intervention to ensure that the electricity of paying consumers will not be cut. 

Nersa spokesperson Charles Hlebela however told Netwerk24 the regulator is not aware of any requests to intervene in the matter between Eskom and municipalities. 

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eskom  |  pravin gordhan  |  municipalities  |  power cuts

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