Eskom will be unable to arrest spiralling municipal debt unless political leaders tell people they must pay for electricity, says a top Eskom executive. Municipalities’ debt to Eskom has grown exponentially, reaching R13.6bn at the end of March, a 30% jump on the previous year. In addition, Soweto residents who are billed directly by Eskom also owe the company about R12bn. Eskom is in a dire financial position with insufficient revenue to service its enormous debt and tariffs that do not allow it to recover all costs. Ayanda Noah, Eskom’s group executive for customer services, said on Tuesday that while several solutions are being tried to recover debt, the crucial missing ingredient is political will. The top 10 defaulting municipalities owe Eskom a total of R9.5bn. Two pilot studies in which municipalities were assisted to get billing systems, tariffs and prepayment meters in place had succeeded, except in one regard: that township residents are not willing to pay, Noah said.

<...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now