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Eskom debt: Government departments need to pay their own bills, says De Lille

Feb 04 2020 17:46
Jan Gerber

Patricia de Lille (Mayor of Cape Town) speaks during the City of Cape Town’s Rondebosch East land claim handover ceremony. (Brenton Geach, Gallo Images, file)

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All government departments will have to pay their own municipal and Eskom bills in future, Minister of Public Works and Infrastructure Patricia de Lille announced at meeting with the Standing Committee on Public Accounts (Scopa).

In December last year, the Scopa received a report from the IMTT which stated that the Department of Public Works and Infrastructure (DPWI) owes Eskom R3bn - out of R3.4bn that is owed to the flailing power utility by government departments. 

The committee called De Lille and her department to explain their plan to pay off the debt.

On Tuesday, De Lille told the committee that the figure is in fact lower than the R3bn mentioned in the report.

Currently, DPWI pays all municipal accounts and Eskom accounts on behalf of all national government departments. The departments then have to reimburse DPWI for these payments. 

She said some municipalities overstated the amount owed to them by DPWI. By Tuesday, the department has resolved 63% of the R3bn – R1.97bn. After the department has verified and engaged with the relevant municipalities, there was a difference of more than R1.7bn from the amount stated in the report.

"This means that once all accounts of these municipalities were verified, the actual amount owed was R186 million as opposed to the initial reported amount of R1.97 billion," De Lille said.

She said the department is engaging with the remaining municipalities to verify the outstanding amounts.

Furthermore, the DPWI pays the debts on behalf out of the other departments out of an overdraft facility, which is not permitted by the Public Finance Management Act.

This did not impress the committee.

DA MP Alf Lees enquired more about the overdraft.

DPWI's chief financial officer Mandla Sithole said it was R2.6bn at December 31. He said it is not with a commercial bank, but with the South African Reserve Bank, and therefore does not attract interest. 

As at December 31, 2019, government departments owe DPWI R3.4 billion for municipal services, De Lille said.

"Despite the debt owed to the DPWI, DPWI continues to pay municipalities and Eskom on time," she said.

"The DPWI has taken a decision to devolve the settling of municipal services to the various user departments with effect from 1 April 2020. This has been communicated with all user departments, Eskom and municipalities."

ANC MP Bheki Hadebe said he doesn't know what to make of the department's report, as it contradicts the report by the IMTT.

"Today we are told we are crucifying the wrong Jesus?" he said.

He asked whether it means that the IMTT lied to the committee.

Scopa chairperson Mkhuleko Hlengwa said the need to "confront the reality that Eskom is a mess", which causes confusion. 

He suggested they don't accept anything as the gospel truth until they have everybody concerned at a meeting. 

"At the heart of this is the total collapse of the IMTT which should have sorted out this mess," Hlengwa said. 

"We are in stormy waters insofar as Eskom debt management is concerned.

"We have been failed by the IMTT."

The IMTT was chaired by Minister of Cooperative Governance and Traditional Affairs Nkosazana Dlamini-Zuma, and got in the committee's crosshairs last year when representatives failed to show up for a meeting with Scopa.

Its mandate has since been taken over by the interministerial task team on Eskom.

The committee resolved to convene a meeting with all relevant governmental and municipal stakeholders responsible for the escalating debt owed to Eskom.  

Scopa will also have a hearing with the department on the overdraft.

"You are not supposed to be operating on an overdraft," Hlengwa said. 

"Your non-compliance continues to escalate. You must know you are going to find yourself on a collision course with us."

Hlengwa said the bottom line is that Eskom must be paid.

"Eskom is in crisis," he said.

"So we need to solve all Eskom's problems, including debt."

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