How the state and Eskom plan to cut municipal debt
The government is looking to introduce measures to reduce the large amounts of money municipalities owe Eskom, including increasing from 15 to 30 the number of days upon which an overdue amount may attract interest. Another proposal is to change the model of penalising municipalities for exceeding their allocated bulk electricity. This emerged at a briefing to Parliament’s standing committee on public accounts (Scopa) by Co-operative Governance and Traditional Affairs Minister Zweli Mkhize, who is also the chairman of the interministerial task team on the issue. Mkhize said the government was talking to Eskom about its credit control policy, with a view to curbing the further escalation of debt. This comes amid concerns from municipalities over the interest the utility charges on overdue amounts.
Cash-strapped Eskom is owed just more than R13bn by municipalities, with the top 10 nonpayers owing R10bn. In turn, municipalities are owed R139bn by residents for services. Some resi...