Municipalities owe Eskom R4,6 billion

22 January 2015

The debt municipalities owe to Eskom have increased with more than R2 billion in the last year. This debt amounted to R2.3 billion in January 2014 but had increased to more than R4.6 billion by the end of the year.

While the country suffered under load shedding the last couple of weeks, South Africa's municipalities owe the electricity provider more than R4.6 billion. AfriForum is of the opinion that this outstanding debt is contributing to the pressure on Eskom's ability to provide electricity.

Tiaan Esterhuizen, Manager of Community Structures at AfriForum, says AfriForum wants to know what the municipalities are doing with this money. "Taxpayers who diligently pay their bills every month don't have electricity due to poor financial management in municipalities," says Esterhuizen.

Municipalities' debt by province:

Mpumalanga - R1 478 699 504

Limpopo - R221 666 382

Free State - R1 606 430 495

Gauteng - R213 785 845

KZN - R63 466 453

Eastern Cape - R188 727 702

Western Cape - R21 182 475

Northern Cape - R142 940 425

Northwest - R671 565 715

"The growing number of outstanding bills can cause further problems if Eskom were to decide to cut the bulk electricity it supplies to towns. If municipalities do not settle their debt, Eskom will have no choice but to cut the electricity supply to these places."

AfriForum further states that the expressions made by President Zuma at the World Economic Forum (WEF) are incorrect. "The government was already warned by the previous management of Eskom 20 years ago. Electricity problems in this country are mainly caused by the government's transformation policies," Esterhuizen says.

Esterhuizen says municipalities that fail to pay their bills should lose their license to supply electricity. AfriForum is of the opinion that privatisation of electricity management will cut out incompetent municipalities while at the same time dealing with the problems of electricity supply. Privatisation can also make debt recovery more efficient and provide more accurate bills to consumers.

"The time has come that private companies should also be able to apply for a license to distribute electricity," says Esterhuizen.

AfriForum asks South Africans to give their opinion on the privatisation of Eskom. Do you think Eskom should be privatised? SMS YES or NO to 45344 (R1).

Statement issued by Tiaan Esterhuizen, Manager: Community Structures, AfriForum, January 22 2015

Click here to sign up to receive our free daily headline email newsletter