ESKOM ARREARS
Blame ANC for municipalities’ debt woes
Financial mismanagement, underqualified cadres, and widespread corruption have all contributed to the failure of municipalities
For several years, municipalities have increasingly felt the pressure of Eskom’s heavy hand — from the perspective of continuous electricity tariff increases and in terms of the threat (and action) of "throttling" electricity supply at peak times to municipalities that are struggling to pay years of debt arrears. At a meeting in Parliament more than a year ago, the South African Local Government Association (Salga) highlighted several concerns it felt would tackle the problem. These included the exorbitant interest rates charged by Eskom (prime plus 5% at the time) and the misalignment of the billing cycles (Eskom charges interest 15 days after invoice, while municipalities work on a 30-day cycle). Both matters were dealt with, although it took nearly a year to implement. But this problem remains as municipalities cannot afford to repay their debt and, for the most part, fail to implement austerity measures to cut wasteful expenditure. Yet Salga cites this as a major success in its ...
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