Share

Municipal debt continues to pull Eskom down

Cape Town – Municipalities with a culture of non-payment owed Eskom R5.6bn in arrear debt as at September 30, the power utility said on Tuesday.

The top 20 defaulting municipalities owed R4.3bn or 76% of the total arrear municipal debt.

Eskom has signed payment agreements with 50 defaulting municipalities, including 15 of the top 20 municipalities, the power utility's CEO Brian Molefe said at its interim results briefing.  

South African local government and the National Treasury have played pivotal roles in encouraging municipalities to settle their debts with Eskom.

Government is considering withholding funds from 27 local municipalities who are failing to pay their electricity bills to Eskom, Bloomberg reported in October.

"The culture of non-payment for services consumed by all levels of government, business and communities must stop," the Treasury said.

Molefe said Eskom’s liquidity is improving, enabling the company to successfully negotiate credit facilities that make it possible to fund itself.

At September 30 2015, Eskom had secured funding of R46bn against a year-end target of R55bn and R19.8bn has been drawn down to date.

The government loan of R60bn was converted to equity and government provided a further R10bn in equity, with an additional R13bn expected by March 2016.

“Going forward, our focus will remain on minimising load shedding, ensuring adequate liquidity, filling key vacancies and improving staff morale. We are also targeting operational efficiencies and an improvement in safety,” Molefe said.

Eskom earnings before interest, taxation, depreciation and amortisation (Ebitda) increased 9% to R24.9bn (2014: R22.8bn) on the back of 8% growth in the revenue of R87.9bn in the six months ended September 30.

Net profit for the period grew 22% to R11.3bn, compared to R9.3bn previously.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.3%
Rand - Pound
24.11
-0.0%
Rand - Euro
20.61
-0.1%
Rand - Aus dollar
12.38
+0.4%
Rand - Yen
0.13
+0.6%
Platinum
901.60
-0.1%
Palladium
998.41
-0.8%
Gold
2,154.06
-0.3%
Silver
24.96
-0.3%
Brent-ruolie
86.89
+1.8%
Top 40
65,526
-1.1%
All Share
71,751
-0.9%
Resource 10
52,809
-1.0%
Industrial 25
99,160
-1.3%
Financial 15
16,511
-0.7%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders